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Ladder Capital Corp

Ladder Capital CorpLADREarnings & Financial Report

NYSE · Financials · Real Estate Investment Trusts

Ladder Capital Corp is a leading commercial real estate finance firm operating primarily across the United States. It originates and manages a diversified portfolio of senior secured commercial mortgage loans, mezzanine debt, commercial mortgage-backed securities, and direct real estate assets, serving property owners, operators and developers across major market segments.

What changed in Ladder Capital Corp's 10-K — 2024 vs 2025

Top changes in Ladder Capital Corp's 2025 10-K

498 paragraphs added · 523 removed · 394 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

69 edited+11 added−19 removed88 unchanged
We expect that certain of our subsidiaries (including any series thereof) may rely on the exclusion from the definition of an “investment company” under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion, as interpreted by the staff of the SEC, requires that an entity invest at least 55% of its assets in “qualifying real estate assets” and at least 80% of its assets in qualifying real estate assets and “real estate-related assets.” Although we reserve the right to modify our business methods at any time, as of December 31, 2024, we expect each of our subsidiaries (including any series thereof) relying on Section 3(c)(5)(C) to primarily hold assets in one or more of the following categories, which are comprised primarily of “qualifying real estate assets”: commercial mortgage loans, investments in securities secured by first mortgage loans, and investments in selected net leased and other real estate assets.
We expect that certain of our subsidiaries (including any series thereof) may rely on the exclusion from the definition of an “investment company” under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion, as interpreted by the staff of the SEC, requires that an entity invest at least 55% of its assets in “qualifying real estate assets” and at least 80% of its assets in qualifying real estate assets and “real estate-related assets.” Although we reserve the right to modify our business methods at any time, as of December 31, 2025, we expect each of our subsidiaries (including any series thereof) relying on Section 3(c)(5)(C) to primarily hold assets in one or more of the following categories, which are comprised primarily of “qualifying real estate assets”: commercial mortgage loans, investments in securities secured by first mortgage loans, and investments in selected net leased and other real estate assets.
On average, our management team members have 29 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer; Pamela McCormack, President; Paul J. Miceli, Chief Financial Officer; Robert Perelman, Head of Asset Management; and Kelly Porcella, Chief Administrative Officer & General Counsel. Anthony V.
On average, our management team members have over 29 years of experience in the industry. Our management team includes Brian Harris, Chief Executive Officer; Pamela McCormack, President; Paul J. Miceli, Chief Financial Officer; Robert Perelman, Head of Asset Management; and Kelly Porcella, Chief Administrative Officer & General Counsel. Anthony V.
The lenders have sole discretion to determine the market value of the collateral on a daily basis, and, if the estimated market value of the collateral declines, the lenders have the right to require additional cash collateral. If the estimated market value of the collateral subsequently increases, we have the right to call back excess cash collateral.
The lenders have sole discretion to determine the market value of the collateral on a daily basis, and, if the estimated market value of the collateral declines, the lenders have the right to require additional collateral. If the estimated market value of the collateral subsequently increases, we have the right to call back excess collateral.
We and our subsidiaries may incur substantial additional debt in the future. However, we are subject to certain restrictions on our ability to incur additional debt in the indentures governing the Notes (the “Indentures”) and our other debt agreements.
We and our subsidiaries may incur substantial additional debt in the future. However, we are subject to certain restrictions on our ability to incur additional debt in the indentures governing the Notes and our other debt agreements.
If we or any of our subsidiaries (including any series thereof) fail to qualify for, and maintain an exemption from, registration under the Investment Company Act, or an exclusion from the definition of an investment company, we could, among other things, be required either to (a) substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company under the Investment Company Act, any of which could have an adverse effect on us, our financial results, the sustainability of our business model or the value of our securities.
If we or any of our subsidiaries (including any series thereof) fail to qualify for, and maintain an exemption from, registration under the Investment Company Act, or an exclusion from the definition of an investment company, we could, among other 13 Table of Contents things, be required either to (a) substantially change the manner in which we conduct our operations to avoid being required to register as an investment company, (b) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so, or (c) register as an investment company under the Investment Company Act, any of which could have an adverse effect on us, our financial results, the sustainability of our business model or the value of our securities.
Our complementary business segments are designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following chart summarizes our investment portfolio as of December 31, 2024 ($ in thousands): (1) CRE equity asset amounts represent undepreciated asset values.
Our complementary business segments are designed to provide us with the flexibility to opportunistically allocate capital in order to generate attractive risk-adjusted returns under varying market conditions. The following chart summarizes our investment portfolio as of December 31, 2025 ($ in thousands): (1) CRE equity asset amounts represent undepreciated asset values.
Esposito, Chief Accounting Officer, and Stephanie Lin, Assistant Secretary, are additional officers of Ladder. 1 Table of Contents Our Businesses We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets.
Esposito, Chief Accounting Officer, and Stephanie Lin, Assistant Secretary, are additional officers of Ladder. 2 Table of Contents Our Businesses We invest primarily in loans, securities and other interests in U.S. commercial real estate, with a focus on senior secured assets.
Ladder was founded in October 2008 and we completed our initial public offering in February 2014. We are led by a disciplined and highly aligned management team. As of December 31, 2024, our management team and directors held interests in our Company comprising over 11% of our total equity.
Ladder was founded in October 2008 and we completed our initial public offering in February 2014. We are led by a disciplined and highly aligned management team. As of December 31, 2025, our management team and directors held interests in our Company comprising over 11% of our total equity.
Item 1. Business Overview Ladder Capital is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets.
Item 1. Business Overview Ladder Capital is an investment grade-rated, internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets.
AAA-rated CMBS or U.S. Agency securities investments in excess of $76.0 million and all other investment grade CMBS or U.S. Agency securities investments in excess of $51.0 million, each in any single class of any single issuance, require the approval of our board of directors’ Risk and Underwriting Committee.
AAA-rated CMBS or U.S. Agency securities investments in excess of $106.0 million and all other investment grade CMBS or U.S. Agency securities investments in excess of $51.0 million, each in any single class of any single issuance, require the approval of our board of directors’ Risk and Underwriting Committee.
The asset management team, 8 Table of Contents together with our underwriting and transaction management teams, monitors the credit performance of our investment portfolio in concert with our third-party servicers and property managers, working closely with borrowers and/or joint-venture partners to manage all of our positions and monitor financial performance of our collateral assets, including execution of business plans and daily activities within our real estate portfolio.
The asset management team, together with our underwriting and transaction management teams, monitors the credit performance of our investment portfolio in concert with our third-party servicers and property managers, working closely with borrowers and/or joint-venture partners to manage all of our positions and monitor financial performance of our collateral assets, including execution of business plans and daily activities within our real estate portfolio.
Any of the Company or our subsidiaries (including any series thereof) may rely on the exemption provided by Section 3(c)(6) of the Investment Company Act to the extent that they primarily engage, directly or through majority-owned subsidiaries (including any series thereof), in the businesses described in Sections 3(c)(3), 3(c)(4) and 3(c)(5) of the Investment Company Act.
Any of the Company or our subsidiaries (including any series thereof) may rely on the exemption provided by Section 3(c)(6) of the Investment Company Act to the extent that they primarily engage, directly or through majority-owned subsidiaries 14 Table of Contents (including any series thereof), in the businesses described in Sections 3(c)(3), 3(c)(4) and 3(c)(5) of the Investment Company Act.
In addition to cash flow from operations, we fund our operations and investment strategy through a diverse array of funding sources, including: • Unsecured corporate bonds • Revolving credit facility • CLO transactions • Secured loan and securities repurchase facilities • Non-recourse mortgage debt • Loan sales and securitizations • Unencumbered assets available for financing • Equity From time to time, we may add financing counterparties that we believe will complement our business, although the agreements governing our indebtedness may limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness.
In addition to cash flow from operations, we fund our operations and investment strategy through a diverse array of funding sources, including: • Senior unsecured notes • Unsecured revolving credit facilities • Secured loan and securities repurchase financing • Non-recourse mortgage debt • Loan sales and securitizations • Unencumbered assets available for financing • CLO transactions • Equity From time to time, we may add financing counterparties that we believe will complement our business, although the agreements governing our indebtedness may limit our ability and the ability of our present and future subsidiaries to incur additional indebtedness.
Taxation We have elected to be subject to tax as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”), commencing with the taxable year ending December 31, 2015. Additionally, certain of our subsidiary entities have also elected to be subject to tax as REITs.
Taxation We have elected to be subject to tax as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”), commencing with the taxable year ending December 31, 2015. Additionally, certain of our subsidiary entities have also elected 12 Table of Contents to be subject to tax as REITs.
In addition, we believe that we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we 13 Table of Contents will not engage primarily, hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting or trading in securities.
In addition, we believe that we will not be considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because we will not engage primarily, hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting or trading in securities.
We maintain a diversified and flexible financing strategy supporting our investment strategy and overall business operations, including the use of unsecured corporate bonds, non-recourse, non-mark-to-market Collateralized Loan Obligations (“CLO”) debt issuances and committed term financing from leading financial institutions. Refer to “Our Financing Strategies” and “Liquidity and Capital Resources” for further information.
We maintain a diversified and flexible financing strategy supporting our investment strategy and overall business operations, including the use of senior unsecured notes, non-recourse, non-mark-to-market Collateralized Loan Obligations (“CLO”) debt issuances and committed term financing from leading financial institutions. Refer to “Our Financing Strategies” and “Liquidity and Capital Resources” for further information.
Included in the $1.1 billion of CMBS securities are $9.1 million of CMBS securities designated as risk retention securities under the Dodd-Frank Act, which are subject to transfer restrictions over the term of the securitization trust.
Included in the $2.1 billion of CMBS securities are $8.8 million of CMBS securities designated as risk retention securities under the Dodd-Frank Act, which are subject to transfer restrictions over the term of the securitization trust.
Regulation as an Investment Adviser Effective as of July 16, 2021, Ladder Capital Asset Management LLC (“LCAM”) is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and currently provides investment advisory services solely to Ladder-sponsored collateralized loan obligation trusts (“CLO Issuers”).
Regulation as an Investment Adviser Effective as of July 16, 2021, Ladder Capital Asset Management LLC (“LCAM”) is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and during the year provided investment advisory services solely to Ladder-sponsored collateralized loan obligation trusts (“CLO Issuers”).
Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 72.3% at December 31, 2024. Conduit First Mortgage Loans. We also originate conduit loans, which are first mortgage loans that are secured by cash-flowing commercial real estate and are available for sale to securitizations.
Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, the weighted average loan-to-value ratio of the portfolio was 69.2% at December 31, 2025. Conduit First Mortgage Loans. We also originate conduit loans, which are first mortgage loans that are secured by cash-flowing commercial real estate and are available for sale to securitizations.
As of December 31, 2024, our net leased properties comprised a total of 3.5 million square feet, 100% leased with an average age since construction of 20 years and a weighted average remaining lease term of 7.6 years. Commercial real estate investments in excess of $20.0 million require the approval of our board of directors’ Risk and Underwriting Committee.
As of December 31, 2025, our net leased properties comprised a total of 3.4 million square feet, 100% leased with an average age since construction of 21.2 years and a weighted average remaining lease term of 6.7 years. Commercial real estate investments in excess of $20.0 million require the approval of our board of directors’ Risk and Underwriting Committee.
During this timeframe, we also acquired $14.1 billion of predominantly investment grade-rated securities secured by first mortgage loans on commercial real estate and $2.1 billion of selected net leased and other real estate assets.
During this timeframe, we also acquired $16.0 billion of predominantly investment grade-rated securities secured by first mortgage loans on commercial real estate and $2.2 billion of selected net leased and other real estate assets.
Environmental reports and supporting documentation are typically reviewed in-house as well as by our dedicated outside environmental counsel who prepares a summary report on each property. Third-party Insurance Review.
Environmental reports and 8 Table of Contents supporting documentation are typically reviewed in-house as well as by our dedicated outside environmental counsel who prepares a summary report on each property. Third-party Insurance Review.
Our businesses, including balance sheet lending, conduit lending, securities investments, and real estate investments, provide for a stable base of net interest and rental income. We have originated $29.9 billion of commercial real estate loans from our inception in October 2008 through December 31, 2024.
Our businesses, including balance sheet lending, conduit lending, securities investments, and real estate investments, provide for a stable base of net interest and rental income. We have originated $31.3 billion of commercial real estate loans from our inception in October 2008 through December 31, 2025.
On January 2, 2025, the Company increased the aggregate maximum borrowing amount of the Revolving Credit Facility to $850.0 million, following the upsize to $725 million on December 20, 2024. The Revolving Credit Facility also allows the Company to enter into additional incremental revolving commitments up to an aggregate facility size of $1.25 billion subject to certain customary conditions.
On January 2, 2025, we increased the aggregate maximum borrowing amount of the Unsecured Revolving Credit Facility to $850.0 million, following the upsize to $725 million on December 20, 2024. The Unsecured Revolving Credit Facility also allows us to enter into additional incremental revolving commitments up to an aggregate facility size of $1.3 billion, subject to certain customary conditions.
Conduit first mortgage loans in excess of $50.0 million also require approval of our board of directors’ Risk and Underwriting Committee. We held one conduit loan with an aggregate carrying value of $26.9 million at December 31, 2024.
Conduit first mortgage loans in excess of $50.0 million also require approval of our board of directors’ Risk and Underwriting Committee. We held one conduit loan with an aggregate carrying value of $28.0 million at December 31, 2025.
From our inception in October 2008 through December 31, 2024, we originated $16.9 billion of conduit loans, of which $16.9 billion were sold into 74 CMBS securitizations, making us, by volume, one of the largest non-bank contributors of loans to CMBS securitizations in the United States in such period.
From our inception in October 2008 through December 31, 2025, we originated $17.0 billion of conduit loans, of which $16.9 billion were sold into 75 CMBS securitizations, making us, by volume, one of the largest non-bank contributors of loans to CMBS securitizations in the United States in such period.
We also support our employees’ wellness and aim to create an environment that provides for work-life balance, including opportunities for a hybrid work schedule. Our Corporate Information Our principal executive offices are located at 320 Park Avenue, 15th Floor, New York, New York 10022, and our telephone number is (212) 715-3170. We maintain a website on the Internet at http://www.laddercapital.com.
We also support our employees’ wellness through an on-site fitness center and aim to create an environment that provides for work-life balance. Our Corporate Information Our principal executive offices are located at 320 Park Avenue, 15th Floor, New York, New York 10022, and our telephone number is (212) 715-3170. We maintain a website on the Internet at http://www.laddercapital.com.
From time to time, certain of these financing arrangements and loans may prohibit certain of our subsidiaries from paying dividends to the Company, from making distributions on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from 11 Table of Contents the Company or from transferring any of such subsidiary’s property or other assets to the Company or other subsidiaries of the Company.
From time to time, certain of these financing arrangements and loans may prohibit certain of our subsidiaries from paying dividends to us, from making distributions on such subsidiary’s capital stock, from repaying to us any loans or advances to such subsidiary from us or from transferring any of such subsidiary’s property or other assets to us or other of our subsidiaries.
We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate that are generally held for investment. As of December 31, 2024, we held a portfolio of 4 mezzanine loans with an aggregate book value of $11.6 million.
We selectively invest in note purchase financings, subordinated debt, mezzanine debt and other structured finance products related to commercial real estate that are generally held for investment. As of December 31, 2025, we held a portfolio of 2 mezzanine loans with an aggregate book value of $7.3 million.
The following chart summarizes our securities investments by market value, 97.6% of which were rated investment grade by Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc. or Fitch Ratings Inc. as of December 31, 2024: As of December 31, 2024, our CMBS investments had a weighted average duration of 2.4 years.
The following chart summarizes our securities investments by market value, 98.6% of which were rated investment grade by Standard & Poor’s Ratings Group, Moody’s Investors Service, Inc. or Fitch Ratings Inc. as of December 31, 2025: As of December 31, 2025, our CMBS investments had a weighted average duration of 3.0 years.
These unsecured financings were comprised of $295.7 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”), $633.9 million in aggregate principal amount of 4.75% senior notes due 2029 (the “2029 Notes”) and $500.0 million in aggregate principal amount of 7.00% senior notes due 2031 (the “2031 Notes,” and collectively with the 2025 Notes, the 2027 Notes and the 2029 Notes, the “Notes”).
These unsecured financings were comprised of $599.5 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”), $633.9 million in aggregate principal amount of 4.75% senior notes due 2029 (the “2029 Notes”), $500.0 million in aggregate principal amount of 5.50% senior notes due 2030 (the “2030 Notes”) and $500.0 million in aggregate principal amount of 7.00% senior notes due 2031 (the “2031 Notes,” collectively with the 2027 Notes, the 2029 Notes, and the 2030 Notes, the “Notes”).
We have significant in-house expertise in the evaluation and trading of these securities, due in part to our experience in originating and underwriting mortgage loans that comprise assets within CMBS trusts, as well as our experience in structuring CMBS transactions. In the future, we may invest in CMBS securities or other securities that are unrated.
We have significant in-house expertise in the evaluation and trading of these securities, due in part to our experience in originating and underwriting mortgage loans that comprise assets within CMBS trusts, as well as our experience in structuring CMBS transactions.
Based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 66.6% at December 31, 2024. Other Commercial Real Estate-Related Loans.
Based on the loan balances and the “as-is” third-party Financial Institutions 3 Table of Contents Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, the weighted average loan-to-value ratio of this portfolio was 68.8% at December 31, 2025. Other Commercial Real Estate-Related Loans.
As of December 31, 2024, by property count and market value, respectively, 60.5% and 68.6% of the collateral underlying our CMBS investment portfolio was distributed throughout the top 25 metropolitan statistical areas (“MSAs”) in the United States, with 4.8% and 12.4%, by property count and market value, respectively, of the collateral located in the New York-Newark-Jersey City MSA, and the concentrations in each of the remaining top 24 MSAs ranging from 0.2% to 5.6% by property count and 0.1% to 8.3% by market value.
As of December 31, 2025, by property count and market value, respectively, 58.6% and 63.9% of the collateral underlying our CMBS investment portfolio was distributed throughout the top 25 metropolitan statistical areas (“MSAs”) in the United States, with 4.4% and 11.2%, by property count and market value, respectively, of the collateral located in the New York-Newark-Jersey City MSA, and the concentrations in each of the remaining top 24 MSAs ranging from 0.5% to 6.5% by property count and 0.2% to 6.9% by market value.
Our balance sheet first mortgage loans may be refinanced by us into a new conduit first mortgage loan upon property stabilization. As of December 31, 2024, we held a portfolio of 53 balance sheet first mortgage 2 Table of Contents loans with an aggregate book value of $1.6 billion.
Our balance sheet first mortgage loans may be refinanced by us into a new conduit first mortgage loan upon property stabilization. As of December 31, 2025, we held a portfolio of 73 balance sheet first mortgage loans with an aggregate book value of $2.2 billion.
Agency securities in any single class of any single issuance in excess of the lesser of (x) $21.0 million and (y) 10% of the total net asset value of the respective Ladder subsidiary or other entity for which Ladder has authority to make investment decisions. 6 Table of Contents Other Investments Unconsolidated Ventures.
Agency securities in any single class of any single issuance in excess of the lesser of (x) $21.0 million and (y) 10% of the total net asset value of the respective Ladder subsidiary or other entity for which Ladder has authority to make investment decisions. Other Investments Unconsolidated Ventures. From time to time we invest in real estate related ventures.
As of December 31, 2024, we held $1.1 billion of U.S. Treasury securities classified as cash and cash equivalents on our consolidated balance sheet. Investment Process Origination Our team of originators is responsible for sourcing and directly originating new commercial first mortgage loans from the brokerage community and directly from real estate owners, operators, developers and investors.
Treasury securities classified as cash and cash equivalents on our consolidated balance sheet. 7 Table of Contents Investment Process Origination Our team of originators is responsible for sourcing and directly originating new commercial first mortgage loans from the brokerage community and directly from real estate owners, operators, developers and investors.
From time to time we invest in real estate related ventures. As of December 31, 2024, the carrying value of our unconsolidated ventures was $19.9 million. United States Treasury Securities. We invest in short-term and long-term U.S. Treasury securities. Short-term U.S. Treasury securities are classified as cash and cash equivalents on our consolidated balance sheet.
As of December 31, 2025, the carrying value of our unconsolidated ventures was $44.5 million. United States Treasury Securities. From time to time, we invest in short-term and long-term U.S. Treasury securities. Short-term U.S. Treasury securities are classified as cash and cash equivalents on our consolidated balance sheet. As of December 31, 2025, we did not hold any U.S.
We are in compliance with all covenants as described in this Annual Report as of December 31, 2024. Competition The commercial real estate finance markets are highly competitive.
We were in compliance in all material respects with the covenants under our financing arrangements as described in this Annual Report as of December 31, 2025. Competition The commercial real estate finance markets are highly competitive.
Borrowings under the Revolving Credit Facility bear interest at a rate equal to adjusted term SOFR plus a margin. The margin for borrowings is adjustable based on the Company’s credit rating and is between 77.5 basis points and 170 basis points. As of December 31, 2024, the Company had no outstanding borrowings on the Revolving Credit Facility.
Borrowings under the Unsecured Revolving Credit Facility bear interest at a rate equal to term SOFR plus a margin of 125 basis points as of December 31, 2025. The margin for borrowings is subject to adjustment based on the Company's credit rating and may range between 77.5 and 170 basis points.
We invest primarily in CMBS, including CRE CLOs, secured by first mortgage loans on commercial real estate. These investments provide a stable and attractive base of net interest income and help us manage our liquidity and hyper-amortization features included in many of these securities positions help mitigate potential credit losses in the event of adverse market conditions.
These investments provide a stable and attractive base of net interest income and help us manage our liquidity and hyper-amortization features included in many of these securities positions help mitigate potential credit losses in the event of adverse market conditions.
Following the date on which the Company has received an investment grade rating from at least two rating agencies, the Revolving Credit Facility will be automatically amended, the pledge of the shares of (or other ownership or equity interest in) certain subsidiaries will be terminated, and each guarantor (other than Ladder Capital Corp and any subsidiary that is a trigger guarantor) will be released and discharged from all obligations as a guarantor and/or pledgor.
Effective May 27, 2025, the date on which we received investment grade ratings from Moody’s and Fitch, the Unsecured Revolving Credit Facility was automatically amended, the pledge of the shares of (or other ownership or equity interest in) certain subsidiaries was terminated, and each guarantor (other than Ladder Capital Corp and any subsidiary that is a trigger guarantor) was released and discharged from all obligations as a guarantor and/or pledgor.
Securities Repurchase Facilities We are a party to multiple uncommitted master repurchase agreements with several counterparties to finance our investments in securities. The securities that serve as collateral for these borrowings are typically AAA-rated CMBS with relatively short duration and significant subordination.
Securities Repurchase Financing We are a party to master repurchase agreements with several counterparties to finance our investments in securities. As of December 31, 2025, the Company had $627.0 million of securities repurchase debt outstanding. The securities that serve as collateral for these borrowings are typically highly liquid AAA-rated CMBS with relatively short duration and significant subordination.
We typically use the independent appraiser’s valuation to calculate ratios such as loan-to-value and loan-to-stabilized-value ratio, as well as to serve as an independent source to which the in-house cash flow and valuation model can be compared. 7 Table of Contents Third-party Engineering Report.
We typically use the independent appraiser’s valuation to calculate ratios such as loan-to-value and loan-to-stabilized-value ratio, as well as to serve as an independent source to which the in-house cash flow and valuation model can be compared. Third-party Engineering Report. We generally engage an approved licensed engineer to complete property condition/engineering reports and a seismic report for applicable properties.
As of December 31, 2024, we owned 151 single tenant net leased properties with an undepreciated book value of $604.9 million. These properties are fully leased on a net basis where the tenant is generally responsible for payment of real estate taxes, property, building and general liability insurance and property and building maintenance expenses.
These properties are fully leased on a net basis where the tenant is generally responsible for payment of real estate taxes, property, building and general liability insurance and property and building maintenance expenses.
Health, Safety and Wellness The Company offers comprehensive healthcare benefits, paid time off, and a business continuity plan that places our employees’ health and safety at its core. Our benefits program include, among other programs, mental health, fertility services, and family leave.
We use the information from these surveys to guide management engagement, decision-making, and strategy. 15 Table of Contents Health, Safety and Wellness The Company offers comprehensive healthcare benefits, paid time off, and a business continuity plan that places our employees’ health and safety at its core. Our benefits program includes, among other programs, mental health, fertility services, and family leave.
We regularly evaluate our workforce composition, recruitment methods, and professional development initiatives to identify opportunities for ongoing enhancement, with the aim of nurturing and preserving a workforce that reflects a wide range of talents and perspectives.
We maintain an anti-discrimination, harassment, and retaliation policy that is reviewed and updated at least annually, along with required annual employee training. We regularly evaluate our workforce composition, recruitment methods, and professional development initiatives to identify opportunities for ongoing enhancement, with the aim of nurturing and preserving a workforce that reflects a wide range of talents and perspectives.
Our “tone at the top” promotes a culture of transparency, accountability, and ethical behavior. As a firm with just 54 employees as of December 31, 2024, Ladder’s flat management structure and open-door policy provide all employees with daily access to our senior management.
As a firm with just 60 employees as of December 31, 2025, Ladder’s flat management structure and open-door policy provide all employees with daily access to our senior management.
The majority of the tenants in our net leased properties are necessity-based businesses. During the year ended December 31, 2024, we collected 100% of rent on these properties. Diversified Commercial Real Estate Properties. As of December 31, 2024, we owned 53 diversified commercial real estate properties throughout the U.S with an undepreciated book value of $299.5 million.
The majority of the tenants in our net leased properties are necessity-based businesses. During the year ended December 31, 2025, we collected 100% of rent on these properties. 5 Table of Contents Diversified Commercial Real Estate Properties.
The following charts set forth our total outstanding balance sheet first mortgage loans, other commercial real estate-related loans, and conduit first mortgage loans as of December 31, 2024, and a breakdown of our loan portfolio by loan size and geographic location and asset type of the underlying real estate by loan balance. 3 Table of Contents Real Estate Net Leased Commercial Real Estate Properties.
Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, loan-to-value ratio of the loan was 58.9% at December 31, 2025. 4 Table of Contents The following charts set forth our total outstanding balance sheet first mortgage loans, other commercial real estate-related loans, and conduit first mortgage loans as of December 31, 2025, and a breakdown of our loan portfolio by loan size and geographic location and asset type of the underlying real estate by loan balance.
As applicable, our asset management team evaluates loan modifications, debt and/or equity recapitalizations and other changes or variations to a borrower’s or venture partner’s business plan or budget and recommend a course of action to the Investment Committee.
As applicable, our asset management team evaluates loan modifications, debt and/or equity recapitalizations and other changes or variations to a borrower’s or venture partner’s business plan or budget and recommend a course of action to the Investment Committee. 9 Table of Contents Disposition and Distribution Our securitization team works with our transaction management and underwriting teams to realize our disposition strategy of selling certain first mortgage loans into CMBS securitization trusts.
We have the option to extend some of our existing facilities subject to a number of customary conditions.
We have the option to extend some of our existing facilities subject to a number of customary conditions. The lenders have sole discretion to include collateral in these facilities and to determine the market value of the collateral.
Unsecured Corporate Bonds As of December 31, 2024, we had $2.0 billion of unsecured corporate bonds outstanding.
Senior Unsecured Notes As of December 31, 2025, we had $2.2 billion of senior unsecured notes outstanding.
During the year ended December 31, 2024, we collected 99% of rent on these properties. 4 Table of Contents The following charts summarize the composition of our real estate investments as of December 31, 2024 ($ in millions): 5 Table of Contents Securities We invest in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant subordination.
The f ollowing charts summarize the composition of our real estate investments as of December 31, 2025 ($ in millions): Securities We invest in primarily AAA-rated real estate securities, typically front pay securities, with relatively short duration and significant subordination. We invest primarily in CMBS, including CRE CLOs, secured by first mortgage loans on commercial real estate.
We believe that our employee relations are good. 14 Table of Contents Human Capital Management and Corporate Culture Ladder is a dynamic company that is distinguished by the talent and dedication of our team and is committed to building and developing diverse, interconnected and engaged employees who work collaboratively to advance the Company’s goals.
None of our employees are represented by a union or subject to a collective bargaining agreement and we have never experienced a work stoppage. We believe that our employee relations are good. Human Capital Management and Corporate Culture Ladder is a dynamic company that is distinguished by the talent and dedication of our team.
The board maintains oversight of human capital management and corporate culture and gains insight at regular board and committee meetings about specific Company human resources initiatives, including talent engagement, attraction, and retention. Workforce Composition and Cultivation With two female co-founders, gender diversity and equality have always been important to Ladder.
The board of directors maintains oversight of human capital management and corporate culture and gains insight at regular board and committee meetings about specific Company human resources initiatives, including talent engagement, attraction, and retention. Workforce Composition and Cultivation We are committed to cultivating an environment where every individual’s contributions are valued, and where mutual respect and dignity are foundational principles.
As of December 31, 2024, the estimated fair value of our portfolio of CMBS investments totaled $1.1 billion in 99 CUSIPs ($10.7 million average investment per CUSIP).
In the future, we may invest in CMBS securities or other securities that are unrated. 6 Table of Contents As of December 31, 2025, the estimated fair value of our portfolio of CMBS investments totaled $2.1 billion in 115 CUSIPs ($18.0 million average investment per CUSIP).
Our “Ladder Climbers” program enables our junior staff to bond together and develop leadership skills. We use employee experience surveys to solicit feedback on topics such as job satisfaction and employee activities. We use the information from these surveys to guide management engagement, decision-making, and strategy.
Our “Ladder Climbers” program fosters leadership skills among junior staff through after-work activities, on-site learning, and informational sessions. We periodically use employee experience surveys to solicit feedback on topics such as job satisfaction and employee activities.
Disposition and Distribution Our securitization team works with our transaction management and underwriting teams to realize our disposition strategy of selling certain first mortgage loans into CMBS securitization trusts. We typically partner with other leading financial institutions to contribute loans to multi-asset securitizations. We have also led single asset securitizations on single loans we have originated.
We typically partner with other leading financial institutions to contribute loans to multi-asset securitizations. We have also led single asset securitizations on single loans we have originated.
Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including pledges of the equity of certain subsidiaries or the assets of certain subsidiaries.
These restrictions, which would permit us to incur substantial additional debt, are subject to significant qualifications and exceptions. Further, certain of our financing arrangements and loans on our real property are secured by our assets, including the assets of certain subsidiaries.
Our mortgage loan financings have primarily fixed rates ranging from 4.39% to 8.09%, mature between 2025 and 2034 and total $446.4 million as of December 31, 2024. These long-term non-recourse mortgages include net unamortized premiums of $3.7 million at December 31, 2024, representing proceeds received upon financing greater than the contractual amounts due under the agreements.
Mortgage Loan Financing We typically finance our real estate investments with long-term, non-recourse mortgage financing. These mortgage loans have carrying amounts of $388.2 million, net of unamortized premiums of $3.1 million as of December 31, 2025, representing proceeds received upon financing greater than the contractual amounts due under these agreements.
Typically, the lender establishes a maximum percentage of the collateral asset’s market value that can be borrowed.
In certain cases, the lenders may require additional collateral, a full or partial repayment of the facilities (margin call), or a reduction in undrawn availability under the facilities. Typically, the lender establishes a maximum percentage of the collateral asset’s market value that can be borrowed.
There is no guarantee that the Company will achieve or maintain an investment grade rating. Hedging Strategies We may enter into interest rate and credit spread derivative contracts to mitigate our exposure to changes in interest rates and credit spreads.
Refer to Note 6, Debt Obligations, Net for further detail. Hedging Strategies We may enter into interest rate and credit spread derivative contracts to mitigate our exposure to changes in interest rates and credit spreads.
As of December 31, 2024, we held one conduit first mortgage loan that was available for contribution into securitizations. Based on the loan balance and the “as-is” third-party FIRREA appraised values at origination, loan-to-value ratio of this loan was 58.9% at December 31, 2024.
As of December 31, 2025, we held one conduit first mortgage loan that was available for contribution into securitizations.
The 2031 Notes were issued during the year ended December 31, 2024 with an aggregate principal balance of $500.0 million. 9 Table of Contents Due in large part to devoting such a large portion of the Company’s capital structure to equity and unsecured corporate bond debt, Ladder maintains a $3.8 billion pool of unencumbered assets, comprised primarily of first mortgage loans and unrestricted cash as of December 31, 2024.
Due in large part to devoting such a large portion of our capital structure to equity and unsecured corporate bond debt, we maintain a $4.1 billion pool of unencumbered assets, comprised primarily of first mortgage loans and unrestricted cash as of December 31, 2025. 10 Table of Contents Unsecured Revolving Credit Facilities Our Unsecured Revolving Credit Facility is available on a revolving basis to finance our working capital needs and for general corporate purposes.
See “Risk factors—Risks related to our Investment Company Act exemption—Maintenance of our exemption from registration under the Investment Company Act imposes significant limits on our operations.” Regulation as a Captive Insurance Company We maintain a captive insurance subsidiary to provide coverage previously self insured by us, including nuclear, biological or chemical coverage, excess property coverage and excess errors and omissions coverage.
See “Risk factors—Risks related to our Investment Company Act exemption—Maintenance of our exemption from registration under the Investment Company Act imposes significant limits on our operations.” Employees As of December 31, 2025, we employed 60 full-time persons. All employees are employed by our operating subsidiary, Ladder Capital Finance LLC.
CLO Debt As of December 31, 2024, we had $601.4 million of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets.
Collateralized Loan Obligations (“CLO”) Debt As of December 31, 2025, we did not have any matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on our consolidated balance sheets. In July 2021, we financed a pool of $607.5 million of loans in a managed CLO transaction (“LCCM 2021-FL2”), which generated $498.2 million of gross proceeds to Ladder.
Under the Indentures, we may not incur certain types of indebtedness unless our consolidated non-funding debt to equity ratio (as defined in the Indentures) is less than or equal to 1.75:1.00 or if the unencumbered assets of the Company and its subsidiaries is less than 120% of their unsecured indebtedness, although our subsidiaries are permitted to incur indebtedness where recourse is limited to the assets and/or the general credit of such subsidiary.
Under the indenture for the 2030 Notes (the “2030 Indenture”), we may not incur certain types of indebtedness unless our leverage ratio (as defined in the 2030 Indenture) is less than or equal to 3.50:1.00 and our fixed charge coverage ratio is more than or equal to 1.25:1.00.
Committed Loan Financing Facilities We are parties to multiple committed loan repurchase agreement facilities, totaling $1.2 billion of credit capacity. As of December 31, 2024, we had $62.7 million of borrowings outstanding, with an additional $1.1 billion of committed financing available.
Committed Loan Financing Facilities We are a party to multiple committed loan repurchase agreement facilities, totaling $656.0 million of credit capacity. As of December 31, 2025, we had no borrowings outstanding. Assets pledged as collateral under these facilities are generally limited to first lien whole mortgage loans, mezzanine loans and certain interests in such first mortgage and mezzanine loans.
Removed
We generally engage an approved licensed engineer to complete property condition/engineering reports and a seismic report for applicable properties.
Added
Real Estate Net Leased Commercial Real Estate Properties. As of December 31, 2025, we owned 149 single tenant net leased properties with an undepreciated book value of $596.2 million.
Removed
On July 13, 2021, a consolidated subsidiary of the Company completed a privately-marketed CLO transaction, which generated $498.2 million of gross proceeds to Ladder, financing $607.5 million of loans at an 82% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 18% subordinate and controlling interest in the CLO.
Added
As of December 31, 2025, we owned 56 diversified commercial real estate properties throughout the U.S with an undepreciated book value of $370.0 million. During the year ended December 31, 2025, we collected 98% of rent on these properties.
Removed
The Company retained control over major decisions made with respect to the administration of the loans in the CLO, including broad discretion in managing these loans, and has the ability to appoint the special servicer under the CLO.
Added
Treasury securities and as of December 31, 2024, we held $1.1 billion of U.S.
Removed
On December 2, 2021, a consolidated subsidiary of the Company completed a privately-marketed CLO transaction, which generated $566.2 million of gross proceeds to Ladder, financing $729.4 million of loans at a 77.6% advance rate on a matched term, non-mark-to-market and non-recourse basis. A consolidated subsidiary of the Company retained an 15.6% subordinate and controlling interest in the CLO.
Added
The Company currently guarantees the obligations under the Notes and the indenture.
Removed
The Company also held two additional tranches as investments totaling 6.8% interest in the CLO. The Company retained control over major decisions made with respect to the administration of the loans in the CLO, including broad discretion in managing these loans, and has the ability to appoint the special servicer under the CLO.
Added
As of December 31, 2025, we had $280.0 million in outstanding borrowings on the Unsecured Revolving Credit Facility.
Removed
Assets pledged as collateral under these facilities are generally limited to first mortgage whole mortgage loans, mezzanine loans and certain interests in such first mortgage and mezzanine loans. Our repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum debt/equity ratios.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

158 edited+73 added−71 removed368 unchanged
Such loans may require anything from minor modifications to a substantial amount of workout negotiations and/or restructuring, which may divert attention from other activities and may entail, among other things, a substantial reduction in the interest rate, a substantial write-down of the principal of the loan and significant legal costs.
Such loans require anything from minor modifications to a substantial amount of workout negotiations and/or restructuring, which may divert attention from other activities and may entail, among other things, a substantial reduction in the interest rate, a substantial write-down of the principal of the loan and significant legal costs.
Even when we purchase very senior interests in loans and/or securitizations, in the event of default and the exhaustion of any equity support, reserve fund, letter of credit, mezzanine loans or B-Notes, and any classes of securities junior to those in which we may invest, we may not be able to recover all of our investment in the debt instruments or securities we purchased.
Even when we purchase very senior interests in loans and/or securitizations, in the event of default and the exhaustion of any equity support, reserve fund, letter of credit, mezzanine loans or B-Notes, and any classes of securities junior to those in which we invest, we may not be able to recover all of our investment in the debt instruments or securities we purchased.
Incurring debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in: (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all; (ii) our inability to borrow unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements; (iii) enforcement of set-off rights against other assets; and/or (iv) the loss of some or all of our assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions, and investment yields may not increase with higher financing costs, including as a result of higher interest rates; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, shareholder distributions or other purposes; • our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; • we may be restricted from capitalizing on business opportunities; • we may be placed at a competitive disadvantage compared to our competitors that have less debt; 32 Table of Contents • we may not be able to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all; • we may have increased difficulty in satisfying our financial obligations; • we may be limited by our ability to borrow additional funds for working capital, acquisitions, debt service requirements, execution of our business strategy or other general partnership purposes; • if we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with REIT requirements regarding the composition of our assets and our sources of income, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory; • we will have increased exposure to risks if the counterparties of our debt obligations are impacted by credit market turmoil or exposure to financial, regulatory or other pressures; and • we may have increased difficulty complying with applicable regulatory requirements.
Incurring debt subjects us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal and interest on the debt or we may fail to comply with all of the other covenants contained in the debt, which is likely to result in: (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision) that we may be unable to repay from internal funds or to refinance on favorable terms, or at all; (ii) our inability to borrow unused amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements; (iii) enforcement of set-off rights against other assets; and/or (iv) the loss of some or all of our assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions, and investment yields may not increase with higher financing costs, including as a result of higher interest rates; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, shareholder distributions or other purposes; • our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; • we may be restricted from capitalizing on business opportunities; • we may be placed at a competitive disadvantage compared to our competitors that have less debt; • we may not be able to refinance debt that matures prior to the investment it was used to finance on favorable terms, or at all; • we may have increased difficulty in satisfying our financial obligations; 33 Table of Contents • we may be limited by our ability to borrow additional funds for working capital, acquisitions, debt service requirements, execution of our business strategy or other general partnership purposes; • if we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with REIT requirements regarding the composition of our assets and our sources of income, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory; • we will have increased exposure to risks if the counterparties of our debt obligations are impacted by credit market turmoil or exposure to financial, regulatory or other pressures; and • we may have increased difficulty complying with applicable regulatory requirements.
Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • variations in our quarterly operating results; • a compression of the yield on our investments and an increase in the cost of our liabilities; 41 Table of Contents • changes in the value of our portfolio; • failure to meet our earnings estimates; • publication of research reports, including by short sellers, or speculation in the press or the investment community, about us or the commercial real estate industry or the failure of securities analysts to cover our Class A common stock; • additions or departures of our executive officers and other key management personnel; • adverse market reaction to any indebtedness we may incur or loss of a major funding source or securities we may issue in the future; • dilutive equity issuances by us, including additional shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock or securities convertible into Class A common stock, as authorized by our board of directors or pursuant to an equity incentive plan, or significant share resales by our shareholders, or the perception that such issuances or resales may occur; • issuance of securities at a price less than our then-current book value per share; • the timing, amount, pricing and any potential discontinuance of Class A common stock repurchases by the Company; • the issuance of any debt or equity securities that rank senior to our Class A common stock or which may have rights, preferences and privileges more favorable than those of our Class A common stock; • actions by shareholders; • changes in market valuations or operating performance of similar companies; • changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; • adverse publicity; • actual or anticipated changes in our current or future dividend yield, including as a result of increases in market interest rates, which may lead investors to demand a higher dividend yield for our Class A common stock and would result in increased interest expenses on our debt that lowers our income available for distribution; • failure to maintain our REIT qualification or exemption from registration under the Investment Company Act; • a credit rating downgrade; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, including us, which is not necessarily related to the operating performance of these companies; • short-selling pressure with respect to shares of our Class A common stock or REITs generally; • price and volume fluctuations in the overall stock market from time to time; and • general market, economic, geopolitical and world health conditions or events, and trends including inflationary concerns.
Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • variations in our quarterly operating results; • a compression of the yield on our investments and an increase in the cost of our liabilities; • changes in the value of our portfolio; • failure to meet our earnings estimates; • publication of research reports, including by short sellers, or speculation in the press or the investment community, about us or the commercial real estate industry or the failure of securities analysts to cover our Class A common stock; • additions or departures of our executive officers and other key management personnel; • adverse market reaction to any indebtedness we may incur or loss of a major funding source or securities we may issue in the future; • dilutive equity issuances by us, including additional shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock or securities convertible into Class A common stock, as authorized by our board of directors or pursuant to an equity incentive plan, or significant share resales by our shareholders, or the perception that such issuances or resales may occur; • issuance of securities at a price less than our then-current book value per share; • the timing, amount, pricing and any potential discontinuance of Class A common stock repurchases by the Company; • the issuance of any debt or equity securities that rank senior to our Class A common stock or which may have rights, preferences and privileges more favorable than those of our Class A common stock; • actions by shareholders; • changes in market valuations or operating performance of similar companies; • changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; • adverse publicity; • actual or anticipated changes in our current or future dividend yield, including as a result of increases in market interest rates, which may lead investors to demand a higher dividend yield for our Class A common stock and would result in increased interest expenses on our debt that lowers our income available for distribution; • failure to maintain our REIT qualification or exemption from registration under the Investment Company Act; • a credit rating downgrade; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, including us, which is not necessarily related to the operating performance of these companies; • short-selling pressure with respect to shares of our Class A common stock or REITs generally; • price and volume fluctuations in the overall stock market from time to time; and • general market, economic, geopolitical and world health conditions or events, and trends including inflationary concerns.
Repurchased loans typically would require a significant allocation of working capital to be carried on our books, and our ability to borrow against such assets may be limited. Any significant repurchases could adversely affect our business and reputation. When we participate in a public securitization, certain risk retention rules apply.
Repurchased loans typically would require a significant allocation of working capital to be carried on our books, and our ability to borrow against such assets may be limited. Any significant repurchases could adversely affect our business and reputation. When we participate in a securitization, certain risk retention rules apply.
We depend on our loan originators to generate borrower clients by, among other things, developing relationships with commercial property owners, real estate agents and brokers, developers and others, which we believe leads to repeat and referral business. Accordingly, we must be able to attract, motivate and retain skilled loan originators.
We also depend on our loan originators to generate borrower clients by, among other things, developing relationships with commercial property owners, real estate agents and brokers, developers and others, which we believe leads to repeat and referral business. Accordingly, we must be able to attract, motivate and retain skilled loan originators.
Some competitors may have a lower cost of funds and access to funding sources that may not be available to us. Under our credit facilities, the lenders have the right to review the assets which we are seeking to finance and approve the purchase and financing of such assets in their sole discretion.
Some competitors may have a lower cost of funds and access to funding sources that are not available to us. Under our credit facilities, the lenders have the right to review the assets which we are seeking to finance and approve the purchase and financing of such assets in their sole discretion.
Furthermore, in the operation of our business we also use third-party vendors that store certain sensitive data, including confidential information about our business and employees, and while we conduct commercially reasonable due diligence on these vendors, these third parties are subject to their own cybersecurity threats.
Furthermore, in the operation of our business we also use third-party vendors that store certain sensitive data, including confidential information about our business and employees, and while we conduct commercially reasonable due diligence on these vendors, such third parties are subject to their own cybersecurity threats.
In particular: • part of the income and gain recognized by certain qualified employee pension trusts with respect to our Class A common stock may be treated as unrelated business taxable income if shares of our Class A common stock are predominantly held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income; • part of the income and gain recognized by a tax-exempt investor with respect to our Class A common stock would constitute unrelated business taxable income if the investor incurs debt in order to acquire the Class A common stock; • part or all of the income or gain recognized with respect to our Class A common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from U.S. federal income taxation under the Code may be treated as unrelated business taxable income; and • to the extent that we have “excess inclusion income,” e.g., from: (i) us (or a part of us, or a disregarded subsidiary of ours) being treated as a “taxable mortgage pool;” (ii) us holding residual interests in a REMIC securitization; or (iii) us receiving income from another REIT that is treated as excess inclusion income, a portion of the distributions paid to a tax-exempt shareholder that is allocable to such excess inclusion income may be treated as unrelated business taxable income.
In particular: • part of the income and gain recognized by certain qualified employee pension trusts with respect to our Class A common stock may be treated as unrelated business taxable income if shares of our Class A common stock are predominantly held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income; • part of the income and gain recognized by a tax-exempt investor with respect to our Class A common stock would constitute unrelated business taxable income if the investor incurs debt in order to acquire the Class A common stock; • part or all of the income or gain recognized with respect to our Class A common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from U.S. federal income taxation under the Code may be treated as unrelated business taxable income; and • to the extent that we have “excess inclusion income,” e.g., from: (i) us (or a part of us, or a disregarded subsidiary of ours) being treated as a “taxable mortgage pool;” (ii) us holding residual interests in a REMIC securitization; or (iii) us receiving income from another REIT that is treated as excess inclusion income, a portion of the distributions paid to a 48 Table of Contents tax-exempt shareholder that is allocable to such excess inclusion income may be treated as unrelated business taxable income.
Incidents may include unauthorized access to our data assets, phishing attacks, account takeovers, business email compromise, social engineering, denial of service, malicious software, ransomware that encrypts critical data as part of a scheme to extort payment, and other electronic or cybersecurity breaches.
Cyber incidents may include unauthorized access to our data assets, phishing attacks, account takeovers, business email compromise, social engineering, denial of service, malicious software, ransomware that encrypts critical data as part of a scheme to extort payment, and other electronic or cybersecurity breaches.
In addition, the trading volume in our Class A common stock may fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, you may be unable to sell your Class A common stock at or above your purchase price, if at all.
In addition, the trading volume in our Class A common stock can fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, you may be unable to sell your Class A common stock at or above your purchase price, if at all.
Additionally, in the event of declining interest rates, borrowers are more likely to prepay, thereby exposing us to the risk that the prepayment proceeds may be reinvested only at a lower interest rate than that borne by the prepaid obligation.
In the event of declining interest rates, borrowers are more likely to prepay, thereby exposing us to the risk that the prepayment proceeds may be reinvested only at a lower interest rate than that borne by the prepaid obligation.
The commercial real estate mortgage loans and other commercial real estate-related loans we provide, the commercial mortgage loans underlying the securities in which we may invest, and the real estate that we own are subject to the ability of the commercial property to generate NOI (and not the independent income or assets of the borrower in the case of mortgage loans).
The commercial real estate mortgage loans and other commercial real estate-related loans we provide, the commercial mortgage loans underlying the securities in which we invest, and the real estate that we own are subject to the ability of the commercial property to generate NOI (and not the independent income or assets of the borrower in the case of mortgage loans).
The commercial real estate mortgages and other commercial real estate-related loans we provide, the commercial mortgage loans underlying the CMBS and other real estate-related securities in which we may invest, and the real estate that we own are subject to the ability of the commercial property to generate net operating income (“NOI”).
The commercial real estate mortgages and other commercial real estate-related loans we provide, the commercial mortgage loans underlying the CMBS and other real estate-related securities in which we invest, and the real estate that we own are subject to the ability of the commercial property to generate net operating income (“NOI”).
In general, such actions could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or an unfavorable price. 33 Table of Contents In order to borrow funds under a repurchase or warehouse agreement or other financing arrangement, the lender has the right to review the potential assets for which we are seeking financing and approve such asset in its sole discretion.
In general, such actions could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or an unfavorable price. 34 Table of Contents In order to borrow funds under a repurchase or warehouse agreement or other financing arrangement, the lender has the right to review the potential assets for which we are seeking financing and approve such asset in its sole discretion.
If the fair market value or income potential of our assets declines as a result of increased interest rates, general market conditions, government actions or other factors, including changes in the carrying value of certain assets, we may need to increase our real estate assets and income and/or liquidate our non-REIT-qualifying assets to maintain our REIT qualification or exemption from registration under the Investment Company Act.
If the relative fair market value or income potential of our REIT-qualified assets declines as a result of increased interest rates, general market conditions, government actions or other factors, including changes in the carrying value of certain assets, we may need to increase our real estate assets and income and/or liquidate our non-REIT-qualifying assets to maintain our REIT qualification or exemption from registration under the Investment Company Act.
In executing our business plan, we regularly consider the allocation of capital to our various commercial real estate business lines, including: (i) our primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) owning and operating commercial real estate, including net leased commercial properties; and (iii) investing in investment grade securities secured by first mortgage loans on commercial real estate.
In executing our business plan, we regularly consider the allocation of capital to our various commercial real estate business segments, including: (i) our primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) owning and operating commercial real estate, including net leased commercial properties; and (iii) investing in investment grade securities secured by first mortgage loans on commercial real estate.
We expect that certain of our subsidiaries (including any series thereof) may rely on the exclusion from the definition of “investment company” under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exclusion, as interpreted by the staff of the SEC, requires that an entity invest at least 55% of its assets in qualifying real estate assets and at least 80% of its assets in qualifying real estate assets and real estate-related assets.
We expect that certain of our subsidiaries (including any series thereof) may rely on the exclusion from the definition of “investment company” under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged” in the business of “purchasing or otherwise acquiring mortgages and other 38 Table of Contents liens on and interests in real estate.” This exclusion, as interpreted by the staff of the SEC, requires that an entity invest at least 55% of its assets in qualifying real estate assets and at least 80% of its assets in qualifying real estate assets and real estate-related assets.
Risks Related to Regulatory and Compliance Matters If our subsidiary that is regulated as a registered investment adviser is unable to meet the requirements of the SEC or fails to comply with certain U.S. federal and state securities laws and regulations, it may face termination of its investment adviser registration, fines or other disciplinary action.
Risks Related to Regulatory and Compliance Matters If our subsidiary that is regulated as a registered investment adviser is unable to meet the requirements of the SEC or fails to comply with certain U.S. federal and state securities laws and regulations, it will face termination of its investment adviser registration, fines or other disciplinary action.
Loans may be or become non-performing for a variety of reasons, including, without limitation, because the underlying property is too highly leveraged or the borrower falls upon financial distress, in either case, resulting in the borrower being unable to meet its debt service obligations.
Loans become non-performing for a variety of reasons, including, without limitation, because the underlying property is too highly leveraged or the borrower falls upon financial distress, in either case, resulting in the borrower being unable to meet its debt service obligations.
If we are required to materially increase our level of allowance for credit losses, such increase could adversely affect our business, financial condition and results of operations. Certain balance sheet investments may be more illiquid and involve a greater risk of loss.
If we are required to materially increase our level of allowance for credit losses, such increase could adversely affect our business, financial condition and results of operations. Certain balance sheet investments are more illiquid and involve a greater risk of loss.
Risks Related to Our Taxation as a REIT • If we fail to qualify as a REIT, we could incur substantial tax liability. As a REIT, we and our investors may still face other tax liabilities. • Our REIT qualification depends on meeting asset, income, organizational, distribution, shareholder ownership and other requirements.
Risks Related to Our Taxation as a REIT • If we fail to qualify as a REIT, we will incur substantial tax liability. As a REIT, we and our investors may still face other tax liabilities. • Our REIT qualification depends on meeting asset, income, organizational, distribution, shareholder ownership and other requirements.
Hedging against interest rate, credit and market value changes may fail to protect or could adversely affect our business because, among other things: • hedging can be expensive, particularly during periods of rising and volatile interest rates; • available hedges may not correspond directly with the risk for which protection is sought; • due to a credit loss or other factors, the duration of the hedge may not match the duration of the related liability; • applicable law may require mandatory margining or clearing of certain hedges we may wish to use, which may raise costs; • the counterparties with which we engage in hedging transactions may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign the hedging transaction; • the hedging counterparty may default on its obligations to us (including payment or delivery obligations); • we may have to limit our use of hedging techniques that might otherwise be advantageous or to implement those hedges through a taxable REIT subsidiary (“TRS”) to comply with REIT requirements, increasing the cost of our hedging activities because our TRSs would be subject to tax on gains and hedging-related losses in our TRSs will generally not provide any tax benefit, except for losses carried forward against future taxable income in the TRSs; and • we may purchase a hedge that turns out not to be necessary (i.e., a hedge that is out of the money).
Hedging against interest rate, credit and market value changes may fail to protect or could adversely affect our business because, among other things: • hedging can be expensive, particularly during periods of rising and volatile interest rates; • available hedges may not correspond directly with the risk for which protection is sought; • due to a credit loss or other factors, the duration of the hedge may not match the duration of the related liability; • applicable law may require mandatory margining or clearing of certain hedges we may wish to use, which may raise costs; • the counterparties with which we engage in hedging transactions may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign the hedging transaction; • the hedging counterparty may default on its obligations to us (including payment or delivery obligations); • we may have to limit our use of hedging techniques that might otherwise be advantageous or to implement those hedges through a taxable REIT subsidiary (“TRS”) to comply with REIT requirements, increasing the cost of our hedging activities because our TRSs would be subject to tax on gains and hedging-related losses in our TRSs will generally not provide any tax benefit, except for losses carried forward against future taxable income in the TRSs; and • we may purchase a hedge that turns out not to be necessary (i.e., a hedge that is out of the money). 40 Table of Contents In addition, we may fail to recalculate, readjust and execute hedges in an efficient manner.
Furthermore, strategic alliance partners may: (i) have economic or business interests or goals that are inconsistent with ours; (ii) take actions contrary to our policies or objectives; (iii) undergo a change of control; (iv) experience financial and other difficulties; or (v) be unable or unwilling to fulfill their obligations, which may affect our financial conditions or results of operations.
Furthermore, strategic alliance partners may: (i) have economic or business interests or goals that are inconsistent with ours; (ii) take actions contrary to our policies or objectives; (iii) undergo a change of control; (iv) experience financial and other 18 Table of Contents difficulties; or (v) be unable or unwilling to fulfill their obligations, which may affect our financial conditions or results of operations.
We also consider the availability and cost of our likely sources of capital. If we fail to appropriately allocate capital and resources across our business lines or fail to optimize our investment and capital raising opportunities, our liquidity and financial performance may be adversely affected.
We also consider the availability and cost of our likely sources of capital. If we fail to appropriately allocate capital and resources across our business segments or fail to optimize our investment and capital raising opportunities, our liquidity and financial performance may be adversely affected.
We have a concentration of investments in the real estate sector and may have further concentrations from time to time in certain property types, locations, tenants and borrowers, which may increase our exposure to the risks of certain economic downturns. We and our borrowers operate in the commercial real estate sector.
We have a concentration of investments in the real estate sector and may have further concentrations from time to time in certain property types, locations, tenants and borrowers, which increases our exposure to the risks of certain economic downturns. We and our borrowers operate in the commercial real estate sector.
The value of our investments may be adversely affected by many factors that are beyond our control, including dislocations, illiquidity and volatility in the market for commercial real estate, commercial real estate finance and the broader financial markets.
The value of our investments can be adversely affected by many factors that are beyond our control, including dislocations, illiquidity and volatility in the market for commercial real estate, commercial real estate finance and the broader financial markets.
If the market in which the asset is located fails to recover according to the borrower’s projections, or if the borrower fails to improve the quality of the asset’s management and/or the value of the asset or fails to execute its business plan, the borrower may not receive a sufficient return 26 Table of Contents on the asset to satisfy the interim loan, and we bear the risk that we may not recover some or all of our investment.
If the market in which the asset is located fails to recover according to the borrower’s projections, or if the borrower fails to improve the quality of the asset’s management and/or the value of the asset or fails to execute its business plan, the borrower may not receive a sufficient return on the asset to satisfy the interim loan, and we bear the risk that we may not recover some or all of our investment.
Properties undergoing rehabilitation or capital improvements are subject to the additional risks of unanticipated delays, cost over-runs, contractor non-performance or borrower disputes with contractors resulting in mechanic’s or materialmen’s liens on the property, and the failure of borrower’s sponsors to contribute sufficient equity funds in order to keep the loan “in balance.” Further, interim loans may be relatively less liquid than loans against stabilized properties due to their short life, their potential unsuitability for securitization, any un-stabilized nature of the underlying real estate and the difficulty of recovery in the event of a borrower’s default.
Properties undergoing rehabilitation or capital improvements are subject to the additional risks of unanticipated delays, cost over-runs, contractor non- 27 Table of Contents performance or borrower disputes with contractors resulting in mechanic’s or materialmen’s liens on the property, and the failure of borrower’s sponsors to contribute sufficient equity funds in order to keep the loan “in balance.” Further, interim loans are relatively less liquid than loans against stabilized properties due to their short life, their potential unsuitability for securitization, any un-stabilized nature of the underlying real estate and the difficulty of recovery in the event of a borrower’s default.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their share price. This type of litigation could result in substantial costs and divert our attention and resources. Our charter contains REIT-related restrictions on the ownership of, and ability to transfer, our Class A common stock.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their share price. This type of litigation could result in substantial costs and divert our attention and resources. 42 Table of Contents Our charter contains REIT-related restrictions on the ownership of, and ability to transfer, our Class A common stock.
We will value these investments quarterly at fair value under GAAP. Because such valuations are subjective, the fair value of certain of our assets may fluctuate 31 Table of Contents over short periods of time and our determinations of fair value may differ materially from the values that would have been used if a ready market for these assets existed.
We will value these investments quarterly at fair value under GAAP. Because such valuations are subjective, the fair value of certain of our assets may fluctuate over short periods of time and our determinations of fair value may differ materially from the values that would have been used if a ready market for these assets existed.
Our determinations of fair value may have a material impact on our earnings, in the case of impaired loans and other assets, trading securities and available-for-sale securities that are subject to the CECL Standard or impairment review, or our accumulated other comprehensive income/(loss) in our shareholders’ equity, in the case of available-for-sale securities that are subject only to temporary impairments.
Our determinations of fair value may have a material impact on our earnings, in the case of impaired loans and other assets, trading securities and available-for-sale securities that are subject to the CECL Standard 32 Table of Contents or impairment review, or our accumulated other comprehensive income/(loss) in our shareholders’ equity, in the case of available-for-sale securities that are subject only to temporary impairments.
Thus, compliance with the REIT requirements may hinder our ability to make and, in certain cases, to maintain ownership of, certain attractive investments. Further, to qualify as a REIT, at the end of each calendar quarter, at least 75% of the value of our assets must consist of cash, cash items, government securities and qualified real estate assets.
Thus, compliance with the REIT requirements may hinder our ability to make and, in certain cases, to maintain ownership of, certain attractive investments. 45 Table of Contents Further, to qualify as a REIT, at the end of each calendar quarter, at least 75% of the value of our assets must consist of cash, cash items, government securities and qualified real estate assets.
In addition, if a significant number of our shareholders determine to sell shares of our Class A common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our Class A common stock. 47 Table of Contents Distributions payable by REITs do not qualify for the reduced tax rates available for some dividends.
In addition, if a significant number of our shareholders determine to sell shares of our Class A common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our Class A common stock. Distributions payable by REITs do not qualify for the reduced tax rates available for some dividends.
Our mortgage loan investments may require us to advance additional loan funds in the future. We may also need to fund capital expenditures and other significant expenses for our real estate property investments.
Certain of our mortgage loan investments may require us to advance additional loan funds in the future. We may also need to fund capital expenditures and other significant expenses for our real estate property investments.
The remainder of our investments in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investments in securities (other than government securities, securities of a TRS, and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The 100% tax does not apply to gains from the sale of foreclosure property or property that is held 45 Table of Contents through a TRS or other taxable corporation, as is the case with our securitization business, although such income will be subject to tax in the hands of the corporation at regular corporate rates.
The 100% tax does not apply to gains from the sale of foreclosure property or property that is held through a TRS or other taxable corporation, as is the case with our securitization business, although such income will be subject to tax in the hands of the corporation at regular corporate rates.
Foreclosure may create a negative public perception of the related property, resulting in a diminution of its value, and also may subject us to environmental and other 24 Table of Contents liabilities associated with owning real estate, adversely affecting our ability to sell the property and potentially causing us to incur substantial remediation costs.
Foreclosure may create a negative public perception of the related property, resulting in a diminution of its value, and also may subject us to environmental and other liabilities associated with owning real estate, adversely affecting our ability to sell the property and potentially causing us to incur substantial remediation costs.
Our securitization activities are affected by a number of factors, including our loan origination volumes, changes in loan values, quality and performance during 28 Table of Contents the period such loans are on our books and conditions in the securitization and credit markets generally and at the time we seek to launch and complete our securitizations.
Our securitization activities are affected by a number of factors, including our loan origination volumes, changes in loan values, quality and performance during the period such loans are on our books and conditions in the securitization and credit markets generally and at the time we seek to launch and complete our securitizations.
Certain locations (especially those in specialty hazard areas) are seeing changes in availability of coverages or limited availability for stated limits (e.g., named storm, flood and other specialty coverages) and shifts to higher premiums and deductibles on all coverages, especially special form coverages like earthquake and named storm.
Certain locations (especially those in specialty hazard areas) are seeing changes in availability of coverages or limited availability for stated 26 Table of Contents limits (e.g., named storm, flood and other specialty coverages) and shifts to higher premiums and deductibles on all coverages, especially special form coverages like earthquake and named storm.
We may originate or acquire subordinate loans (including mezzanine loans secured by equity in the property), subordinate participation interests in loans (often referred to as B-Notes) and subordinate rated and/or unrated securities (including, without limitation, certain “risk retention” interests required to be retained by certain participants in securitization transactions).
From time to time, we originate and acquire subordinate loans (including mezzanine loans secured by equity in the property), subordinate participation interests in loans (often referred to as B-Notes) and subordinate rated and/or unrated securities (including, without limitation, certain “risk retention” interests required to be retained by certain participants in securitization transactions).
Our reserves for loan losses may prove inadequate. • Inflation has and may continue to stress property performance and value and thus mortgage loan performance. • Our participation in the market for mortgage loan securitizations may expose us to risks that could result in losses to us and our access to the CMBS securitization market and the timing of our securitization activities and real estate sales may greatly affect our quarterly financial results. • We may be subject to risks associated with unfunded conditional loan commitments. • Mortgages on facilities that are subject to ground leases risk the collateral reverting to the ground lessor unexpectedly during the term of the loan due to such borrower’s default under, and the resulting termination of, the ground lease. • The expense of operating and owning real property, including net leased real estate assets, may impact our cash flow and our investments in net leased properties could be adversely affected by our reliance on the net leased tenants. • The leases at the properties underlying commercial real estate loans or securities or the properties held by us may not be relet or renewed on favorable terms, or at all. • Current and future venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on venture partners’ financial condition and liquidity and disputes between us and our partners. • Our investments in CMBS and other real estate-related securities are generally subject to losses. • Our determinations of fair value may have a material impact on our financial condition and results of operations.
Our reserves for loan losses may prove inadequate. • Inflation has and may continue to stress property performance and value and thus mortgage loan performance. 16 Table of Contents • Our participation in the market for mortgage loan securitizations exposes us to risks that could result in losses to us and our access to the CMBS securitization market, and the timing of our securitization activities and real estate sales causes our quarterly financial results to fluctuate. • We are subject to risks associated with unfunded conditional loan commitments. • Mortgages on facilities that are subject to ground leases risk the collateral reverting to the ground lessor unexpectedly during the term of the loan due to such borrower’s default under, and the resulting termination of, the ground lease. • The expense of operating and owning real property, including net leased real estate assets, impacts our cash flow and our investments in net leased properties could be adversely affected by our reliance on the net leased tenants. • The leases at the properties underlying commercial real estate loans or securities or the properties held by us may not be relet or renewed on favorable terms, or at all. • Current and future venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on venture partners’ financial condition and liquidity and disputes between us and our partners. • Our investments in CMBS and other real estate-related securities are generally subject to losses. • Our determinations of fair value may have a material impact on our financial condition and results of operations.
The rise of high-profile security breaches by hackers, foreign governments, and other malicious actors has resulted in an increased risk of a security breach or IT disruption. Simultaneously, the state, federal and international regulatory environment related to information security, data collection and use, and privacy has become increasingly rigorous, with new and constantly changing requirements potentially applicable to our business.
The rise of high-profile security breaches by hackers, foreign governments, and other malicious actors has resulted in an increased risk of security breaches or IT disruptions. Simultaneously, the state, federal and international regulatory environment related to information security, data collection and use, and privacy has become increasingly rigorous, with new and constantly changing requirements potentially applicable to our business.
We believe that a change in any one of the following factors, among others, could adversely affect our results of operations and impair our ability to pay distributions to our shareholders: • the profitability of the assets we hold or acquire; • the allocation of assets between our REIT-qualified and non-REIT-qualified subsidiaries; • the impact of changes in interest rates on our net interest income; • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates; • our ability to make profitable investments and to realize profit therefrom; • margin calls or other expenses that may reduce our cash flow; and • defaults in our asset portfolio or decreases in the value of our portfolio .
We believe that a change in any one of the following factors, among others, could adversely affect our results of operations and impair our ability to pay distributions to our shareholders: • the profitability of the assets we hold or acquire; • the allocation of assets between our REIT-qualified and non-REIT-qualified subsidiaries; • the impact of changes in interest rates on our net interest income; • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates; • margin calls or other expenses that may reduce our cash flow; and • defaults in our asset portfolio or decreases in the value of our portfolio .
If securities analysts or investors focus on such comparative quarter-to-quarter performance, our stock price performance may be more volatile than if such persons compared a wider period of results of operations. We may be subject to risks associated with unfunded conditional loan commitments or other future advances, such as declining real estate values and operating performance.
If 29 Table of Contents securities analysts or investors focus on such comparative quarter-to-quarter performance, our stock price performance may be more volatile than if such persons compared a wider period of results of operations. We are subject to risks associated with unfunded conditional loan commitments or other future advances, such as declining real estate values and operating performance.
Certain statements in “Risk Factors” are forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Annual Report. 15 Table of Contents Summary of Principal Risk Factors Our business is subject to change, risks, and uncertainties, as described herein.
Certain statements in “Risk Factors” are forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Annual Report. Summary of Principal Risk Factors Our business is subject to change, risks, and uncertainties, as described herein.
The market value of CLO securities may be affected by, among other things, changes in the market value of the underlying loans held by the CLO, changes in the distributions on the underlying loans, defaults and recoveries on the underlying loans, capital gains and losses on the underlying loans (or foreclosure assets), prepayments on underlying loan 35 Table of Contents and the availability, prices and interest rate of underlying loans.
The market value of CLO securities may be affected by, among other things, changes in the market value of the underlying loans held by the CLO, changes in the distributions on the underlying loans, defaults and recoveries on the underlying loans, capital gains and losses on the underlying loans (or foreclosure assets), prepayments on underlying loan and the availability, prices and interest rate of underlying loans.
Risks Related to Our Indebtedness 16 Table of Contents • Our business is leveraged, which could lead to greater losses than if we were not as leveraged. • There can be no assurance that we will be able to access financing on favorable terms, or at all, and restrictive covenants and the potential need for additional collateral may limit our ability to fully pursue our business strategies. • Any credit ratings assigned to the debt securities we issue or our investments could be downgraded, which could have a material impact on our financial condition, liquidity and results of operations. • We are subject to counterparty risk associated with our debt obligations and cash balances. • Our use of leverage may create a mismatch between the duration of financing, and the life of, the investments made using the proceeds of such financing, as well as between the index of our investments and the index of our leverage. • We have financed, and may in the future seek to finance, certain of our shorter-term loans via CLOs and such transactions involve significant risks, including that the sponsor of such transactions will receive distributions from the CLO only if the CLO generates enough income to first pay all the investors in senior tranches and all CLO expenses.
Risks Related to Our Indebtedness • Our business is leveraged, which could lead to greater losses than if we were not as leveraged. • There can be no assurance that we will be able to access financing on favorable terms, or at all, and restrictive covenants and the potential need for additional collateral may limit our ability to fully pursue our business strategies. • Any credit ratings assigned to the debt securities we issue or our investments could be downgraded. • We are subject to counterparty risk associated with our debt obligations and cash balances. • Our use of leverage may create a mismatch between the duration of financing, and the life of, the investments made using the proceeds of such financing, as well as between the index of our investments and the index of our leverage. • We have financed, and may in the future seek to finance, certain of our shorter-term loans via CLOs and such transactions involve significant risks, including that the sponsor of such transactions will receive distributions from the CLO only if the CLO generates enough income to first pay all the investors in senior tranches and all CLO expenses.
Declines in commercial real estate values also tend to result in reduced borrower equity, further hindering borrowers’ ability to refinance in an environment of increasingly restrictive lending standards and giving them less incentive to cure delinquencies and avoid foreclosure.
Declines in commercial real estate values also tend to result in reduced 20 Table of Contents borrower equity, further hindering borrowers’ ability to refinance in an environment of increasingly restrictive lending standards and giving them less incentive to cure delinquencies and avoid foreclosure.
A projection of an economic downturn, for example, could cause a decline in the price of lower credit quality securities because the ability of obligors of mortgage loans underlying the mortgage-backed securities to make principal and interest payments may be 27 Table of Contents impaired.
A projection of an economic downturn, for example, could cause a decline in the price of lower credit quality securities because the ability of obligors of mortgage loans underlying the mortgage-backed securities to make principal and interest payments may be impaired.
If we, as the owner, or the borrower, were to fail to meet these obligations, the applicable tenant could abate rent or terminate the applicable lease, which may result in a loss of capital 29 Table of Contents invested in, and anticipated profits from, the property.
If we, as the owner, or the borrower, were to fail to meet these obligations, the applicable tenant could abate rent or terminate the applicable lease, which may result in a loss of capital invested in, and anticipated profits from, the property.
To the extent that the SEC staff publishes new or different guidance or disagrees with our analysis with respect to any assets of our 37 Table of Contents subsidiaries we have determined to be qualifying real estate assets or real estate-related assets, we may be required to adjust our strategy accordingly.
To the extent that the SEC staff publishes new or different guidance or disagrees with our analysis with respect to any assets of our subsidiaries we have determined to be qualifying real estate assets or real estate-related assets, we may be required to adjust our strategy accordingly.
Declining real estate values may reduce the level of new mortgage and other real estate-related loan originations since borrowers often use appreciation in the value of their existing properties to support the purchase of or investment in additional properties.
Declining real estate values may reduce the level of new mortgage and other real estate-related loan originations since borrowers often use appreciation in the value of their existing properties to support the 19 Table of Contents purchase of or investment in additional properties.
Further, 19 Table of Contents declining real estate values significantly increase the likelihood that we will incur losses on our loans in the event of default because the value of our collateral may be insufficient to cover our basis in the related loan.
Further, declining real estate values significantly increase the likelihood that we will incur losses on our loans in the event of default because the value of our collateral may be insufficient to cover our basis in the related loan.
Risks Related to Our Class A Common Stock The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our shareholders. The market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations.
Risks Related to Our Class A Common Stock The market price and trading volume of our Class A common stock can be volatile, which could result in rapid and substantial losses for our shareholders. The market price of our Class A common stock can be highly volatile and is subject to wide fluctuations.
These laws and regulations are complex, compliance with them may be costly and 40 Table of Contents time consuming, and our failure to comply with any of these laws and regulations could subject us to lawsuits or government actions and damage our reputation.
These laws and regulations are complex, compliance with them may be costly and time consuming, and our failure to comply with any of these laws and regulations could subject us to lawsuits or government actions and damage our reputation.
Such venture investments may involve risks not otherwise present when we originate or acquire investments without partners, including the following: • we may not have exclusive control over the investment or the venture, which may prevent us from taking actions that are in our best interest; • fraud or other misconduct by our partners; • venture agreements often restrict the transfer of a partner’s interest or may otherwise restrict our ability to sell the interest when we desire and/or on advantageous terms; • we may rely upon our venture partners to manage the day-to-day operations of the venture and underlying loans or assets, as well as to prepare financial information for the venture and any failure to perform these obligations may have a negative impact our performance and results of operations; • our partner may experience a change of control, which could result in new management of our partner with less experience or conflicting interests to ours and be disruptive to our business; • venture agreements often restrict the transfer of a partner’s interest or may otherwise restrict our ability to sell the interest when we desire and/or on advantageous terms; • any future venture agreements may contain buy-sell provisions pursuant to which one partner may initiate procedures requiring the other partner to choose between buying the other partner’s interest or selling its interest to that partner; • we may not be in a position to exercise sole decision-making authority regarding the investment or venture, which could create the potential risk of creating impasses on decisions, such as with respect to acquisitions or dispositions; • a partner may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals; • a partner may be in a position to take action contrary to our instructions, requests, policies or objectives, including our policy with respect to maintaining our qualification as a REIT and our exemption from registration under the Investment Company Act; • a partner may fail to fund its share of required capital contributions or may become bankrupt, which may mean that we and any other remaining partners generally would remain liable for the venture’s liabilities; • our relationships with our partners are contractual in nature and may be terminated or dissolved under the terms of the applicable venture agreements and, in such event, we may not continue to own or operate the interests or investments underlying such relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; 30 Table of Contents • disputes between us and a partner may result in litigation or arbitration that could increase our expenses and prevent our officers and directors from focusing their time and efforts on our business and could result in subjecting the investments owned by the venture to additional risk; or • we may, in certain circumstances, be liable for the actions of a partner, and the activities of a partner could adversely affect our ability to continue to qualify as a REIT or maintain our exemption from registration under the Investment Company Act, even though we do not control the venture.
Such venture investments may involve risks not otherwise present when we originate or acquire investments without partners, including the following: • we may not have exclusive control over the investment or the venture, which may prevent us from taking actions that are in our best interest; • a venture partner may engage in fraud or other misconduct; • a venture agreement may restrict the transfer of a partner’s interest or otherwise restrict our ability to sell the interest when we desire or on advantageous terms; • we may rely upon a venture partner to manage day-to-day operations of the venture and underlying loans or assets, as well as to prepare financial information for the venture, and any failure to perform these obligations may have a negative impact on our performance and results of operations; • a partner may experience a change of control, which could result in new management with less experience or conflicting interests to ours and be disruptive to our business; • a venture agreement may contain provisions that limit our exit options or require consent from other parties to transfer our interest; • a venture agreement may contain buy-sell provisions pursuant to which one partner may initiate procedures requiring the other partner to choose between buying the other partner’s interest or selling its interest to that partner; • we may not be in a position to exercise sole decision-making authority regarding the investment or venture, which could create impasses on decisions, such as with respect to acquisitions or dispositions; • a partner may, at any time, have economic or business interests or goals that are, or may become, inconsistent with our business interests or goals; • a partner may be in a position to take action contrary to our instructions, requests, policies or objectives, including our policy with respect to maintaining our qualification as a REIT and our exemption from registration under the Investment Company Act; • a partner may fail to fund its share of required capital contributions or may become bankrupt, which may mean that we and any other remaining partners generally would remain liable for the venture’s liabilities; • our relationship with a partner is contractual in nature and may be terminated or dissolved under the terms of the applicable venture agreement and, in such event, we may not continue to own or operate the interests or investments underlying such relationship or may need to purchase such interests or investments at a premium to the market price to continue ownership; • a dispute with a partner may result in litigation or arbitration that could increase our expenses, prevent our officers and directors from focusing their time and efforts on our business, and subject the investments owned by the venture to additional risk; or 31 Table of Contents • we may, in certain circumstances, be liable for the actions of a partner, and the activities of a partner could adversely affect our ability to continue to qualify as a REIT or maintain our exemption from registration under the Investment Company Act, even though we do not control the venture.
Risks Related to Our Portfolio • The repayment of mortgage loans may be limited by factors such as: federal, state and local laws, including bankruptcy, insolvency and other debtor and tenant relief laws; their non-recourse and potentially illiquid nature; our evaluation of the creditworthiness of borrowers and the underlying properties, including environmental issues and a property’s income potential; our ability to manage credit risk and modify or restructure non-performing loans; the sufficiency of reserves; subordination; the lack of full control as a participant or co-lender; and insurance coverage. • Certain balance sheet investments, such as transitional loans, mezzanine loans, B-Notes and other subordinate positions, participations and preferred equity may be more illiquid and involve a greater risk of loss. • Provisions for loan losses are difficult to estimate.
Risks Related to Our Portfolio • The repayment of mortgage loans are limited by factors such as: federal, state and local laws, including bankruptcy, insolvency and other debtor and tenant relief laws; their non-recourse and potentially illiquid nature; our evaluation of the creditworthiness of borrowers and the underlying properties, including environmental issues and a property’s income potential; our ability to manage credit risk and modify or restructure non-performing loans; the sufficiency of reserves; subordination; the lack of full control as a participant or co-lender; and insurance coverage. • Properties acquired through foreclosure, transitional loans, mezzanine loans, B-Notes and other subordinate positions, participations and preferred equity are more illiquid and involve a greater risk of loss. • Provisions for loan losses are difficult to estimate.
Refer to Note 15, Income Taxes, to our consolidated financial statements for the year ended December 31, 2024, included elsewhere in this Annual Report, for additional information. Changes to U.S. federal income tax laws could materially and adversely affect us and our shareholders.
Refer to Note 14, Income Taxes , to our consolidated financial statements for the year ended December 31, 2025, included elsewhere in this Annual Report, for additional information. Changes to U.S. federal income tax laws could materially and adversely affect us and our shareholders.
We rely on the efficacy of our cybersecurity/IT policies, systems and processes developed and managed by our Cybersecurity Team in order to protect our technology assets from IT outages, cybersecurity incidents and intrusions. The secure operation of our IT networks and systems and the proper processing and maintenance of this information are critical to our business operations.
We rely on the efficacy of our cybersecurity/IT policies, systems and processes developed and managed by our Cybersecurity Team to protect our technology assets from IT outages, cybersecurity incidents and intrusions. The secure operation of our IT networks and systems and the proper processing and maintenance of this information is critical to our business operations.
The risks factors that the Company considers material include, but are not limited to, the following: Risks Related to Our Operations • Our success depends upon hiring and retaining qualified loan originators and maintaining strategic business alliances. • The allocation of capital among our business lines may vary, which may adversely affect our financial performance. • We operate using financial models and according to proprietary underwriting criteria in a highly competitive market for lending and other investment opportunities, which may limit our ability to originate or acquire desirable loans and other investments in our target assets and/or our ability to yield a certain return on our investments.
The risks factors that the Company considers material include, but are not limited to, the following: Risks Related to Our Operations • Our success depends upon hiring and retaining qualified personnel and maintaining strategic business alliances. • The allocation of capital among our business segments varies, which may adversely affect our financial performance. • We operate using financial models and according to proprietary underwriting criteria in a highly competitive market for lending and other investment opportunities, which may limit our ability to originate or acquire desirable loans and other investments in our target assets and/or our ability to finance and yield a certain return on our investments.
The U.S. federal income tax rules dealing with REITs are constantly under review by persons involved in the legislative process, the IRS and the U.S. Treasury Department, which results in statutory changes as well as frequent revisions 48 Table of Contents to regulations and interpretations.
The U.S. federal income tax rules dealing with REITs are constantly under review by persons involved in the legislative process, the IRS and the U.S. Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations.
Many competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do. Unlike Ladder, certain of our competitors may not be subject to the operating constraints associated with 18 Table of Contents REIT tax compliance or maintenance of an exemption from registration under the Investment Company Act.
Many competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do. Unlike Ladder, certain of our competitors are not subject to the operating constraints associated with REIT tax compliance or maintenance of an exemption from registration under the Investment Company Act.
In addition, we may transact in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally permissible.
In addition, we may transact in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally 41 Table of Contents permissible.
Our compliance with the annual REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis.
Our compliance with 43 Table of Contents the annual REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis.
Some of our investments may be rated by one or more of Moody’s, Fitch, Standard & Poor’s, Realpoint, Dominion Bond Rating Service, Morningstar Credit Ratings, Kroll Bond Ratings or other credit rating agencies.
Some of our investments are rated by one or more of Moody’s, Fitch, Standard & Poor’s, Realpoint, Dominion Bond Rating Service, Morningstar Credit Ratings, Kroll Bond Ratings or other credit rating agencies.
Where a borrower has failed to meet its obligations, we could determine that we need to modify the loan or advance funds to protect the collateral, which could result in our funding more money than we originally anticipated in order to maximize the value of our investment, even though there is no assurance additional funding would be the best course of action.
Where a borrower has failed to meet its obligations, we could determine that we need to modify the loan or advance funds to protect the collateral, which could result in our funding more money than we originally anticipated in order to maximize the value of our investment, even though there is no assurance additional funding would achieve the desired result.
Even if a mortgage loan is recourse to the borrower (or if a non-recourse carve-out to the borrower applies), in many cases, the borrower’s assets are limited primarily to 22 Table of Contents its interest in the related mortgaged property.
Even if a mortgage loan is recourse to the borrower (or if a non-recourse carve-out to the borrower applies), in many cases, the borrower’s assets are limited primarily to its interest in the related mortgaged property.
While we believe that we have structured our securitizations such that the above taxes would not apply to our shareholders with respect to taxable mortgage pools held by our subsidiary REIT, our subsidiary REIT is in part owned by our TRS, which will pay corporate level tax on any income that it may be allocated from the subsidiary REIT.
While we intend to structure prospective securitizations such that the above taxes would not apply to our shareholders with respect to taxable mortgage pools held by our subsidiary REIT, our subsidiary REIT is in part owned by our TRS, which would pay corporate level tax on any income that it may be allocated from the subsidiary REIT.
Such concentration in one economic sector may increase the volatility of our returns and may also expose us to the risk of economic downturns in this sector to a greater extent than if our portfolio also included other sectors of the economy.
Such concentration in one economic sector increases the volatility of our returns and exposes us to the risk of economic downturns in this sector to a greater extent than if our portfolio also included other sectors of the economy.
NOI of an income-producing property can be affected by many factors, including, but not limited to: • the ongoing need for capital improvements, particularly in older structures; • changes in general or local market conditions; • increases in property taxes and other operating expenses; • changes in tenant mix and performance, the occupancy or rental rates of the property or, for a property that requires new leasing activity, a failure to lease the property in accordance with the projected leasing schedule; • competition from comparable property types or properties; • unskilled or inexperienced property management; • limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of a property difficult; • development projects that experience cost overruns or otherwise fail to perform as projected including, without limitation, failure to complete planned renovations, repairs, or construction; • unanticipated increases in real estate taxes and other operating expenses; • challenges to the owner’s claim of title to the real property; • environmental considerations, including liability for testing, monitoring and remediation; • changes in zoning laws, rent control laws and other similar legal restrictions on property ownership and operation; • other governmental rules and policies including those associated with a transition to a low-carbon economy; • community health issues, including, without limitation, epidemics and pandemics; • unanticipated structural defects or costliness of maintaining the property; • casualty and condemnation; • uninsured or underinsured losses, such as possible acts of theft, terrorism, social unrest or civil disturbances; • a decline in the operational performance of a facility on the real property (such facilities may include multifamily rental facilities, office properties, retail facilities, hospitality facilities, healthcare-related facilities, industrial facilities, warehouse facilities, restaurants, mobile home facilities, recreational or resort facilities, parking lot facilities or other facilities); and • large-scale fire, earthquake or severe weather-related damage to, or the effect of climate change on, the property and/or its operations.
NOI of an income-producing property can be affected by many factors, including, but not limited to: • the ongoing need for capital improvements, particularly in older structures; • changes in general or local market conditions; • increases in property taxes and other operating expenses; • changes in tenant mix and performance, the occupancy or rental rates of the property or, for a property that requires new leasing activity, a failure to lease the property in accordance with the projected leasing schedule; • competition from comparable property types or properties; • unskilled or inexperienced property management; • limited availability of mortgage funds or fluctuations in interest rates which may render the sale and refinancing of a property difficult; • development projects that experience cost overruns or otherwise fail to perform as projected including, without limitation, failure to complete planned renovations, repairs, or construction; • challenges to the owner’s claim of title to the real property; • environmental considerations, including liability for testing, monitoring and remediation; • changes in zoning laws, rent control laws and other similar legal restrictions on property ownership and operation; • other governmental rules and policies; • community health issues, including, without limitation, epidemics and pandemics; • unanticipated structural defects or costliness of maintaining the property; • casualty and condemnation; 23 Table of Contents • uninsured or underinsured losses, such as possible acts of theft, terrorism, social unrest or civil disturbances; • a decline in the operational performance of a facility on the real property (such facilities may include multifamily rental facilities, office properties, retail facilities, hospitality facilities, healthcare-related facilities, industrial facilities, warehouse facilities, restaurants, mobile home facilities, recreational or resort facilities, parking lot facilities or other facilities); • large-scale fire, earthquake, wildfires, drought, or other natural disaster, or severe weather-related damage to the property and/or its operations; and • rising utility costs, increased insurance premiums, regulatory environmental requirements, or the potential liability relating to environmental matters that impact the value of properties we may acquire or the properties underlying our investments.
Risks Related to Our Operations The allocation of capital among our business lines may vary, which may adversely affect our financial performance and liquidity.
Risks Related to Our Operations The allocation of capital among our business segments varies, which may adversely affect our financial performance and liquidity.
Risks Related to Our Class A Common Stock • The price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our shareholders. • Our charter contains REIT-related restrictions on the ownership of, and ability to, transfer our Class A common stock. • Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control.
Risks Related to Our Class A Common Stock • The price and trading volume of our Class A common stock can be volatile, which has and could in the future result in shareholder losses. • Our charter contains REIT-related restrictions on the ownership of, and ability to, transfer our Class A common stock. • Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control.
In addition, such subsidiary REIT is required to satisfy, on a stand-alone basis, the REIT asset, income, organizational, distribution, shareholder ownership and other requirements described above, and if it were to fail to qualify as a REIT, then: (i) our subsidiary REIT would face adverse tax consequences similar to those described above with respect to our qualification as a REIT; and (ii) such failure could have an adverse effect on our ability to comply with the REIT income and asset tests and thus could impair our ability to qualify as a REIT unless we could avail ourselves of certain relief provisions.
In addition, such subsidiary REIT is required to satisfy, on a stand-alone basis, the REIT asset, income, organizational, distribution, shareholder ownership and other requirements described above, and if it were to fail to qualify as a REIT, then: (i) our subsidiary REIT would face adverse tax consequences similar to those described above with respect to our qualification as a REIT; and (ii) such failure could have an adverse effect on our ability to comply with the REIT income and asset tests and thus could impair our ability to qualify as a REIT unless we could avail ourselves of certain relief provisions. 46 Table of Contents We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.
In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of a TRS, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% (25% for tax years after 2025) of the value of our total assets can be represented by securities of one or more TRSs.
Such requirements relate to, among other things, assets under management, fiduciary duties to advisory clients, an effective compliance program, conflicts of interest, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an advisor and advisory clients and general anti-fraud prohibitions. LCAM currently provides investment advisory services solely to Ladder-sponsored CLO Issuers.
Such requirements relate to, among other things, assets under management, fiduciary duties to advisory clients, an effective compliance program, conflicts of interest, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an advisor and advisory clients and general anti-fraud prohibitions.
If we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if material weaknesses in our internal control over financial reporting are identified, the market price of our Class A common stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.
If we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if material weaknesses in our internal control over financial reporting are identified, the market price of our Class A common stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. 50 Table of Contents Accounting and tax rules for certain of our transactions are highly complex and involve significant judgment and assumptions.
We are required to report such original issue discount based on a constant yield method and are taxed based on the assumption that all future projected payments due on such mortgage-backed securities will be made.
Moreover, some of the mortgage-backed securities that we acquire may have been issued with original issue discount. We are required to report such original issue discount based on a constant yield method and are taxed based on the assumption that all future projected payments due on such mortgage-backed securities will be made.
Our access to the CMBS securitization market and the timing of our securitization and real estate sale activities may greatly affect our quarterly financial results.
Our access to the CMBS securitization market and the timing of our securitization and real estate sale activities causes our quarterly financial results to fluctuate.
In addition, we would be subject to a non-deductible 4% excise tax if the actual amount distributed to our shareholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.
In addition, we would be subject to a non-deductible 4% excise tax if the actual amount distributed to our shareholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. We intend to make distributions to our shareholders to comply with the REIT qualification requirements of the Code.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Item 1C. Cybersecurity To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.
Item 1C. Cybersecurity Ladder has a cybersecurity risk management program that is designed to assess, identify, manage, and govern material risks from cybersecurity threats. Our cybersecurity risk management program is also a key component of our overall risk management program.
Ladder has a cybersecurity risk management program that is designed to assess, identify, manage, and govern material risks from cybersecurity threats. Our cybersecurity risk management program is also a key component of our overall risk management program.
The Audit Committee receives quarterly or as needed updates from the CTO regarding the cybersecurity risks the Company faces based on the current cybersecurity threat landscape, as well as the status of the measures undertaken by the Company to manage those risks.
The Audit Committee receives quarterly or as needed updates from the CTO and GC regarding the cybersecurity risks the Company faces based on the current cybersecurity threat landscape, as well as the status of the measures undertaken by the Company to manage those risks. The Audit Committee reports to the board as needed.
Ladder conducts routine risk assessments to identify cyber threats and vulnerabilities and assess the likelihood of occurrence and severity of the impact of such threats and vulnerabilities on the Company. Ladder regularly updates the risk assessment in order to inform Ladder’s cybersecurity program and controls and to prioritize risk mitigation and remediation in an evolving threat landscape.
Ladder conducts routine risk assessments to identify cyber threats and vulnerabilities and assess the likelihood of occurrence and severity of the impact of such threats and vulnerabilities on the Company. Ladder regularly updates its risk assessment to guide Ladder’s cybersecurity risk management program and controls and to prioritize risk mitigation and remediation in an evolving threat landscape.
“Risk Factors” for additional information. Ladder leverages a senior cybersecurity team (the “Cybersecurity Team”) comprised of the Chief Technology Officer (“CTO”), Chief Administrative Officer and General Counsel (the “GC”), Chief Compliance Officer (the “CCO”) and Senior Regulatory Counsel, as well as senior representatives from Ladder’s outsourced technology firm.
Ladder leverages a senior cybersecurity team (the “Cybersecurity Team”) comprised of the Chief Technology Officer (“CTO”), Chief Administrative Officer and General Counsel (the “GC”), Chief Compliance Officer and Senior Regulatory Counsel (the “CCO”), as well as senior representatives from Ladder’s outsourced technology firm.
The Cybersecurity Team maintains Ladder’s cybersecurity program, which is designed to identify, detect and manage cybersecurity risks. The Cybersecurity Team monitors technology trends and developments to inform improvements and adjustments to Ladder's information technology (“IT”) infrastructure and oversees the Company's various cybersecurity training initiatives.
The Cybersecurity Team maintains Ladder’s cybersecurity risk management program, which is designed to identify, detect, assess, and manage cybersecurity risks. The Cybersecurity Team monitors technology trends and developments to inform improvements and modifications to Ladder’s information technology (“IT”) infrastructure and oversees the Company’s various cybersecurity training initiatives.
Ladder’s CTO has over 20 years of experience in the design, 51 Table of Contents engineering, implementation, and management of information technology, including as the founder of an IT managed servicer provider for professional and financial services companies.
Ladder’s CTO has over 20 years of experience in the design, engineering, implementation, and management of information technology, including as the founder of an IT managed service provider for professional and financial services companies.
Ladder also maintains other appropriate cybersecurity controls, including: • Annual penetration testing by rotating third-party vendors; • Vulnerability scans; • Company-wide cybersecurity training, including quarterly phishing exercises; • Tabletop exercises; • Vendor cybersecurity diligence; and • Cyber insurance.
Ladder also maintains other appropriate cybersecurity controls, including: • Annual penetration testing by rotating third-party service providers; • Weekly vulnerability scans; • Annual company-wide cybersecurity and AI training, including monthly phishing exercises; • Annual tabletop exercises; • Vendor cybersecurity diligence; and • Cyber insurance.
Refer to the risk factor captioned “Cybersecurity threats or other security breaches could cause significant business disruption and could possibly compromise sensitive information belonging to us or our employees, borrowers, clients and other counterparties, along with the emerging use of AI, could harm our business and our reputation and subject us to regulatory scrutiny” in Part I, Item 1A.
Refer to the risk factor captioned “Cybersecurity threats, information technology (“IT”) system failures or other security breaches could cause significant business disruption and could possibly compromise sensitive information belonging to us or our employees, borrowers, clients and other counterparties and could harm our business and our reputation and subject us to regulatory scrutiny” in Part I, Item 1A.
The GC helped establish and continues to oversee the Company’s cybersecurity risk management framework, including a best practice approach to cybersecurity governance, testing and diligence. The CCO helps ensure adherence to regulatory standards and helps refine our cybersecurity policies and training initiatives.
The GC helped establish the Company’s cybersecurity risk 52 Table of Contents management framework and has overseen the Company’s best practice approach to cybersecurity governance, testing and diligence for over a decade. The CCO helps ensure adherence to regulatory standards and helps refine our cybersecurity policies and training initiatives.
Most of the third parties that have access to sensitive information belonging to us or our borrowers, clients or other counterparties are lenders, law firms and other third parties that require such access in connection with Ladder’s commercial lending activities. These third parties tend to be highly regulated and generally maintain mature cybersecurity programs and data security controls.
Most of the third parties that have access to sensitive information belonging to either us or our borrowers, clients or other counterparties are lenders, law firms and other third parties that require such access in connection with Ladder’s commercial lending activities.
The members of the Cybersecurity Team have extensive on-the-job experience in cybersecurity matters, sharing responsibility for cybersecurity, as well as for regulatory, compliance and/or IT.
The Cybersecurity Team also oversees the Company’s testing and deployment of AI technologies and monitors AI-enabled cybersecurity threats. The members of the Cybersecurity Team have extensive on-the-job experience in cybersecurity matters, sharing responsibility for cybersecurity, as well as for regulatory, compliance and/or IT.
The Cybersecurity Team conducts a formal evaluation of Ladder’s applicable policies and cyber risks and mitigants on at least an annual basis. Ladder’s outsourced technology firm, as well as internal auditors, participate in this evaluation.
These policies include incident response, data classification, physical and network security polices, remote access, record retention and secure destruction policies. The Cybersecurity Team conducts a formal evaluation of Ladder’s applicable policies and cyber risks and mitigants on at least an annual basis. Ladder’s outsourced technology firm, as well as internal auditors, participate in this evaluation.
The Audit Committee, on behalf of the board of directors, is responsible for oversight of the Company’s strategies to assess and mitigate cybersecurity risks, as set forth in the Audit Committee’s charter.
Our board of directors is responsible for the overall governance of our cybersecurity risk management program and is aware of the critical nature of managing risks associated with its cybersecurity threats. The Audit Committee assists the board in its oversight of the Company’s strategies to assess and mitigate cybersecurity risks, as set forth in the Audit Committee’s charter.
Ladder maintains cybersecurity policies and procedures designed to manage these risks and ensure that the Cybersecurity Team and other relevant employees are informed of cybersecurity incidents in a timely manner. These policies include incident response, data classification, physical and network security polices, remote access, record retention and secure destruction policies.
Ladder maintains cybersecurity policies and procedures informed by National Institute of Standards and Technology (“NIST”) or International Organization for Standardization (“ISO”) and designed to manage these risks and ensure that the Cybersecurity Team and other relevant employees are made aware of cybersecurity incidents in a timely manner.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties We lease our corporate headquarters office at 320 Park Avenue, 15th Floor, New York, New York, 10022. The Company also leases a regional office in Miami, Florida. Refer to Schedule III included in Item 8 of this Annual Report on Form 10-K for a listing of investment properties owned as of December 31, 2024.
Item 2. Properties We lease our corporate headquarters office at 320 Park Avenue, 15th Floor, New York, New York, 10022. The Company also leases a regional office in Miami, Florida. Refer to Schedule III included in Item 8 of this Annual Report on Form 10-K for a listing of investment properties owned as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Further, certain of our subsidiaries, such as our registered investment adviser and captive insurance company, are subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. We are not presently a party to any material enforcement proceedings, litigation related to regulatory compliance matters or any other type of material litigation matters.
Item 3. Legal Proceedings From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course. Further, certain of our subsidiaries, such as our registered investment adviser, are subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters.
We maintain insurance policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards. 52 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 53 Table of Contents Part II
We are not presently a party to any material enforcement proceedings, litigation related to regulatory compliance matters or any other type of material 53 Table of Contents litigation matters. We maintain insurance policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards.
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Item 3. Legal Proceedings From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course.
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Item 4. Mine Safety Disclosures Not applicable. 54 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by shareholders 623,788 $ 14.84 8,792,686 Equity compensation plans not approved by shareholders N/A N/A N/A Total 623,788 $ 14.84 8,792,686 Performance Graph Our Class A common stock began trading on the NYSE under the symbol “LADR” on February 6, 2014.
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by shareholders 623,788 $ 11.86 8,792,686 Equity compensation plans not approved by shareholders N/A N/A N/A Total 623,788 $ 11.86 8,792,686 Performance Graph Our Class A common stock began trading on the NYSE under the symbol “LADR” on February 6, 2014.
(2) Amount excludes commissions paid associated with share repurchases. 54 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes information, as of December 31, 2024, relating to the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) and 2023 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2023 Omnibus Incentive Plan”) pursuant to which equity securities of the Company were authorized for issuance.
(2) Amount excludes commissions paid associated with share repurchases. 55 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes information, as of December 31, 2025, relating to the 2014 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2014 Omnibus Incentive Plan”) and 2023 Ladder Capital Corp Omnibus Incentive Equity Plan (the “2023 Omnibus Incentive Plan”) pursuant to which equity securities of the Company were authorized for issuance.
Prior to that time, there was no public market for our Class A common stock. The following graph compares total shareholder returns, assuming reinvestment of dividends, for the period December 31, 2019 through December 31, 2024 to the FTSE NAREIT Mortgage REIT Index, the Standard & Poor’s Index (“S&P 500 Index”) and the Bloomberg REIT Mortgage Index.
Prior to that time, there was no public market for our Class A common stock. The following graph compares total shareholder returns, assuming reinvestment of dividends, for the period December 31, 2020 through December 31, 2025 to the FTSE NAREIT Mortgage REIT Index, and the Standard & Poor’s Index (“S&P 500 Index”).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock trades on the NYSE under the symbol “LADR.” Holders On January 31, 2025, the Company had 20 Class A common shareholders of record. This does not include the beneficial ownership of shares held in nominee name.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock trades on the NYSE under the symbol “LADR.” Holders On January 23, 2026, the Company had 19 Class A common shareholders of record. This does not include the beneficial ownership of shares held in nominee name.
The closing price per share of Class A common stock on January 31, 2025 was $11.21. On January 31, 2025, the Company had no Class B common shareholders of record and no Class B common stock outstanding.
The closing price per share of Class A common stock on January 23, 2026 was $11.07. On January 23, 2026, the Company had no Class B common shareholders of record and no Class B common stock outstanding.
As of December 31, 2024, the Company has a remaining amount available for repurchase of $67.6 million, which represents 4.8% in the aggregate of its outstanding Class A common stock, based on the closing price of $11.19 per share on such date.
As of December 31, 2025, the Company has a remaining amount available for repurchase of $90.6 million, which represents 6.5% in the aggregate of its outstanding Class A common stock, based on the closing price of $10.99 per share on such date.
Stock Repurchases On April 24, 2024, the board of directors authorized the repurchase of $75.0 million of the Company’s Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the July 27, 2022 authorization from $43.6 million to $75.0 million.
Stock Repurchases On April 23, 2025, the board of directors authorized the repurchase of $100.0 million of the Company’s Class A common stock from time to time without further approval. This authorization increased the remaining outstanding authorization per the April 24, 2024 authorization from $66.8 million to $100.0 million.
During the year ended December 31, 2024, the Company repurchased 711,191 shares of Class A common stock at an average of $11.31 per share for a total aggregate purchase price of $8.0 million.
During the year ended December 31, 2025, the Company repurchased 964,539 shares of Class A common stock at an average of $10.60 per share for a total aggregate purchase price of $10.2 million.
The following table presents information with respect to repurchases of Class A common stock of the Company made during the three months ended December 31, 2024 ($ in thousands, except average price paid per share): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) October 1, 2024 - October 31, 2024 14,131 $ 11.23 14,131 $ 73,439 November 1, 2024 - November 30, 2024 69,000 11.43 69,000 72,651 December 1, 2024 - December 31, 2024 448,369 11.26 448,369 67,604 Total 531,500 $ 11.28 531,500 $ 67,604 (1) On April 24, 2024, the board of directors authorized the repurchase of $75.0 million of the Company’s Class A common stock from time to time without further approval.
The following table presents information with respect to repurchases of Class A common stock of the Company made during the three months ended December 31, 2025 ($ in thousands, except average price paid per share): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) October 1, 2025 - October 31, 2025 45,052 $ 10.58 45,052 $ 91,031 November 1, 2025 - November 30, 2025 30,668 10.44 30,668 90,711 December 1, 2025 - December 31, 2025 12,111 10.84 12,111 90,580 Total 87,831 $ 10.57 87,831 $ 90,580 (1) On April 23, 2025, the board of directors authorized the repurchase of $100.0 million of the Company’s Class A common stock from time to time without further approval.
The past shareholder return shown on the following graph is not necessarily indicative of future performance. 55 Table of Contents Total Shareholder Returns Based upon initial investment of $100 on December 31, 2019 (1) Ladder Capital Corp FTSE NAREIT Mortgage REIT Index S&P 500 Index Bloomberg REIT Mortgage Index (2) December 31, 2019 $ 100.00 $ 100.00 $ 100.00 $ 100.00 December 31, 2020 $ 59.42 $ 79.57 $ 116.26 $ 76.65 December 31, 2021 $ 76.11 $ 91.00 $ 147.52 $ 88.69 December 31, 2022 $ 70.18 $ 69.23 $ 118.84 $ 71.20 December 31, 2023 $ 83.43 $ 80.07 $ 147.64 $ 77.75 December 31, 2024 $ 86.75 $ 78.16 $ 182.05 $ 74.59 (1) Dividend reinvestment is assumed at quarter end.
The past shareholder return shown on the following graph is not necessarily indicative of future performance. 56 Table of Contents Total Shareholder Returns Based upon initial investment of $100 on December 31, 2020 (1) Ladder Capital Corp FTSE NAREIT Mortgage REIT Index S&P 500 Index December 31, 2020 $ 100.00 $ 100.00 $ 100.00 December 31, 2021 $ 130.78 $ 115.61 $ 126.89 December 31, 2022 $ 119.84 $ 81.97 $ 102.22 December 31, 2023 $ 144.27 $ 100.45 $ 126.99 December 31, 2024 $ 150.41 $ 98.08 $ 156.59 December 31, 2025 $ 157.77 $ 107.71 $ 182.25 (1) Dividend reinvestment is assumed at quarter end.
We retained the Bloomberg REIT Mortgage Index for this year for comparison purposes until the index was no longer available, but will not include that index in our stock performance graph going forward. The closing price of the Company’s Class A common stock on December 31, 2019 (on which the graph is based) was $18.04.
The closing price of the Company’s Class A common stock on December 31, 2020 (on which the graph is based) was $9.78.
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For this Annual Report, the Company has changed its comparable REIT Index from the Bloomberg REIT Mortgage Index to the FTSE NAREIT Mortgage REIT Index, given the Bloomberg REIT Mortgage Index was discontinued in 2024.
Removed
(2) Bloomberg REIT Mortgage Index was discontinued on February 29, 2024. Returns are shown until its discontinuation. Item 6. [Reserved] 56 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

126 edited+19 added−31 removed73 unchanged
Activity for the year ended December 31, 2024 included real estate investment sales of $102.3 million and acquisitions in real estate via foreclosure of $48.8 million. In addition, we purchased $10.0 billion of short-term U.S. Treasury securities during the year ended December 31, 2024, of which $10.0 billion matured during the year ended December 31, 2024.
Activity for the year ended December 31, 2024 included real estate investment sales of $102.3 million and acquisitions of real estate via foreclosure of $48.8 million. In addition, we purchased $10.0 billion of short-term U.S. Treasury securities during the year ended December 31, 2024, of which $10.0 billion matured during the year ended December 31, 2024.
Our principal debt financing sources include: (1) long-term senior unsecured notes in the form of corporate bonds; (2) an unsecured Revolving Credit Facility; (3) CLO issuances; (4) committed and uncommitted secured funding provided by banks and other lenders; and (5) long term non-recourse mortgage financing.
Our principal debt financing sources include: (1) long-term senior unsecured notes in the form of corporate bonds; (2) an Unsecured Revolving Credit Facility; (3) committed and uncommitted secured funding provided by banks and other lenders; and (4) long term non-recourse mortgage financing; and (5) CLO issuances.
Net cash provided by investing activities of $932.8 million was driven by $1.6 billion of repayment from mortgage loan receivables, $276.6 million in repayments on securities, $102.3 million in proceeds from sale of real estate and $32.2 million of proceeds from sale of securities, partially offset by $(898.0) million in purchases of securities and $(195.2) million of origination of mortgage loans held for investment.
Net cash provided by investing activities of $932.8 million was driven by $1.6 billion of repayments from mortgage loan receivables, $276.6 million in repayments on securities, $102.3 million in proceeds from sale of real estate and $32.2 million of proceeds from sale of securities, partially offset by $(898.0) million in purchases of securities and $(195.2) million of origination of mortgage loans held for investment.
These new investments and general corporate expenses may be funded with existing cash, proceeds from loan and securities payoffs, through financing using our Revolving Credit Facility or loan and security financing facilities, or through additional debt or equity raises.
These new investments and general corporate expenses may be funded with existing cash, proceeds from loan and securities payoffs, through financing using our Unsecured Revolving Credit Facility or loan and security financing facilities, or through additional debt or equity raises.
Critical Accounting Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses.
Critical Accounting Estimates and Policies The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses.
We believe distributable earnings assists investors in comparing our operating performance and our ability to pay dividends across reporting periods on a more relevant and consistent basis by excluding from GAAP measures certain non-cash expenses and unrealized results as well as eliminating timing differences related to conduit securitization gains and changes in the values of assets and derivatives.
We believe distributable earnings assists investors in comparing our operating performance and our ability to pay dividends across reporting periods on a more relevant and consistent basis by excluding from GAAP measures certain non-cash expenses and unrealized results as well as eliminating timing differences related to conduit securitization gains or losses and changes in the values of assets and derivatives.
For purposes of distributable earnings, we exclude the impact of unrealized gains and losses associated with these securities and include realized gains or losses in connection with any disposition of securities.
For purposes of distributable earnings, we exclude the impact of unrealized gains and losses associated with these securities and include realized gains and losses in connection with any disposition of securities.
The increase in provision associated with the general reserve during the year ended December 31, 2023 was primarily due to adverse changes in macroeconomic market conditions affecting commercial real estate partially offset by a decrease in the size of our balance sheet first mortgage loan portfolio as a result of repayments.
The increase in provision associated with the general reserve during the year ended December 31, 2024 was primarily due to adverse changes in macroeconomic market conditions affecting commercial real estate, partially offset by a decrease in the size of our balance sheet first mortgage loan portfolio as a result of repayments.
In the future, we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of distributable earnings should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. 74 Table of Contents
In the future, we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of distributable earnings should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. 75 Table of Contents
Revolving Credit Facility The Company’s Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On January 2, 2025, the Company increased the aggregate maximum borrowing amount of the Revolving Credit Facility to $850.0 million, following the upsize to $725 million on December 20, 2024.
Unsecured Revolving Credit Facilities The Company’s Unsecured Revolving Credit Facility is available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. On January 2, 2025, the Company increased the aggregate maximum borrowing amount of the Unsecured Revolving Credit Facility to $850.0 million, following the upsize to $725 million on December 20, 2024.
Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of December 31, 2024, the weighted average interest rate on mortgage borrowings against our real estate assets was 6.0%, compared to 5.9% as of December 31, 2023.
Our real estate is comprised of non-interest bearing assets; however, interest incurred on mortgage financing collateralized by such real estate is included in interest expense. As of December 31, 2025, the weighted average interest rate on mortgage borrowings against our real estate assets was 5.9%, compared to 6.0% as of December 31, 2024.
A discussion regarding our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
A discussion regarding our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Refer to Note 5, Real Estate and Related Lease Intangibles, Net, for further details. 59 Table of Contents Net Result from Mortgage Loan Receivables Held for Sale Net result from mortgage loan receivables held for sale includes unrealized losses on loans held for sale related to lower of cost or market adjustments and realized gains and losses from the sale of loans.
Refer to Note 5, Real Estate and Related Lease Intangibles, Net, for further details. 60 Table of Contents Net Result from Mortgage Loan Receivables Held for Sale Net result from mortgage loan receivables held for sale includes unrealized losses on loans held for sale related to lower of cost or market adjustments and realized gains and losses from the sale of loans.
As of December 31, 2024 and December 31, 2023, all such acquired intangible assets and liabilities have finite lives. We review finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
As of December 31, 2025 and December 31, 2024, all such acquired intangible assets and liabilities have finite lives. We review finite lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
Future Liquidity Needs In addition to the future contractual obligations above, the Company, in the coming year and beyond, as a part of its normal course of business will require cash to fund unfunded loan commitments and new investments in a combination of balance sheet mortgage loans, conduit loans, real estate investments and securities as it deems appropriate as well as necessary expenses as a part of general corporate purposes.
Future Liquidity Needs In addition to the future contractual obligations above, the Company, in the coming year and beyond, as a part of its normal course of business will require cash to fund unfunded loan commitments and new investments in a combination of balance sheet mortgage loans, conduit loans, real estate investments and securities as it deems appropriate as well as necessary expenses 68 Table of Contents as a part of general corporate purposes.
Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. 68 Table of Contents Interest Rate Environment The nature of the Company’s business exposes it to market risk arising from changes in interest rates.
Commitments are subject to our loan borrowers’ satisfaction of certain financial and nonfinancial covenants and may or may not be funded depending on a variety of circumstances including timing, credit metric hurdles, and other nonfinancial events occurring. Interest Rate Environment The nature of the Company’s business exposes it to market risk arising from changes in interest rates.
Overview Ladder Capital is an internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets.
Overview Ladder Capital is an investment grade-rated, internally-managed real estate investment trust (“REIT”) that is a leader in commercial real estate finance. We originate and invest in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets.
The derivative positions that generated these results were a combination of five and ten year U.S. treasury rate futures that we employed in an effort to hedge the interest rate risk primarily on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates.
The derivative positions that generated these results were primarily ten year U.S. treasury rate futures that we employed in an effort to hedge the interest rate risk primarily on the financing of our fixed rate assets and the net interest income we earn against the impact of changes in interest rates.
There were no properties classified as held for sale as of December 31, 2024 or December 31, 2023. We did not record any impairments of real estate for the years ended December 31, 2024 or December 31, 2023.
There were no properties classified as held for sale as of December 31, 2025 or December 31, 2024. We did not record any impairments of real estate for the years ended December 31, 2025 or December 31, 2024.
During 2024, management reviewed and evaluated these critical accounting estimates and policies and believes they are appropriate. The following discussion describes critical accounting estimates that require more significant judgment by management.
During 2025, management reviewed and evaluated these critical accounting estimates and policies and believes they are appropriate. The following discussion describes critical accounting estimates that require more significant judgment by management.
This amount excludes $30.9 million of future funding commitments that require the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching a pre-determined net operating income which may or may not be achieved.
This amount excludes $45.6 million of future funding commitments that require the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching a pre-determined net operating income which may or may not be achieved.
LCFH issued the Notes with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes.
LCFH issued the Notes with Ladder Capital Finance Corporation (“LCFC”), as co-issuers on a joint and several basis. LCFC is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. The Company guarantees the obligations under the Notes and the indenture.
The Company utilizes distributable earnings, a non-GAAP financial measure, as a supplemental measure of our operating performance.
Reconciliation of Non-GAAP Financial Measures Distributable Earnings The Company utilizes distributable earnings, a non-GAAP financial measure, as a supplemental measure of our operating performance.
Senior Unsecured Notes As of December 31, 2024, the Company had $2.0 billion of unsecured corporate bonds outstanding.
As of December 31, 2024, the Company had $2.0 billion of senior unsecured notes outstanding.
Net result from derivative transactions of $1.5 million was comprised of a realized gain of $1.9 million and an unrealized loss of $0.4 million for the year ended December 31, 2023. The hedge positions primarily relate to fixed rate conduit loans and securities investments.
Net result from derivative transactions of $5.4 million was comprised of a realized gain of $7.3 million and an unrealized loss of $1.9 million for the year ended December 31, 2024. The hedge positions primarily relate to fixed rate conduit loans and securities investments.
We often borrow at a lower percentage of the collateral asset’s value than the maximum leaving us with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.
The Company often borrows at a lower percentage of the collateral asset’s value than the maximum leaving the Company with excess borrowing capacity that can be drawn upon at a later date and/or applied against future margin calls so that they can be satisfied on a cashless basis.
(2) On April 24, 2024, the Board authorized repurchases up to $75.0 million in aggregate. Dividends In order for the Company to maintain its qualification as a REIT under under Sections 856 through 860 of the Internal Revenue Code (the “Code”), it must annually distribute at least 90% of its taxable income.
(2) On April 23, 2025, the Board authorized repurchases up to $100.0 million in aggregate. Dividends In order for the Company to maintain its qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code (the “Code”), it must annually distribute at least 90% of its taxable income.
Refer to Note 10, Equity, to our consolidated financial statements included elsewhere in this Annual Report, for disclosure of dividends declared. 66 Table of Contents Principal Repayments on Investments We receive principal amortization on our loans and securities as part of the normal course of our business.
Refer to Note 9, Equity, to our consolidated financial statements included elsewhere in this Annual Report, for disclosure of dividends declared. Principal Repayments on Investments We receive principal amortization on our loans and securities as part of the normal course of our business.
Activity for the year ended December 31, 2024 included s ecurities purchases of $898.0 million, sales of $32.2 million and $276.8 million of amortization and paydowns, which contributed to a net increase in our securities portfolio of $595.3 million.
Activity for the year ended December 31, 2024 included securities purchases of $898.0 million, sales of $32.2 million and $276.8 million of amortization and paydowns, which 59 Table of Contents contributed to a net increase in our securities portfolio of $595.3 million.
The CECL accounting estimate is subject to uncertainty as a result of changing macro-economic market conditions, as well as the vintage and location of the underlying assets as disclosed in Note 3, Mortgage Loan Receivables, to our consolidated financial statements included elsewhere in this Annual Report.
The CECL accounting estimate is subject to uncertainty as a result of changing macroeconomic market conditions, as well as the vintage and location of the underlying assets as disclosed in Note 3, Mortgage Loan Receivables, to our consolidated 70 Table of Contents financial statements included elsewhere in this Annual Report.
Distributable earnings prior to charge-offs of allowance for credit losses is used as an additional performance metric to consider when declaring our dividends. 71 Table of Contents We define distributable earnings as income before taxes adjusted for: (i) net (income) loss attributable to noncontrolling interests in consolidated ventures; (ii) our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investments in unconsolidated ventures in excess of distributions received; (iii) the impact of derivative gains and losses related to hedging fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk as of the end of the specified accounting period; (iv) economic gains or losses on loan sales, certain of which may not be recognized under GAAP accounting in consolidation for which risk has substantially transferred during the period, as well as the exclusion of the related GAAP economics in subsequent periods; (v) unrealized gains or losses related to our investments in securities recorded at fair value in current period earnings; (vi) unrealized and realized provision for loan losses and real estate impairment; (vii) non-cash stock-based compensation; and (viii) certain non-recurring transactional items.
We define distributable earnings as income before taxes adjusted for: (i) net (income) loss attributable to noncontrolling interests in consolidated ventures; (ii) our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investments in unconsolidated ventures in excess of distributions received; (iii) the impact of derivative gains and losses related to hedging fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk as of the end of the specified accounting period; (iv) economic gains or losses on loan sales, certain of which may not be recognized under GAAP accounting in consolidation for which risk has substantially transferred during the period, as well as the exclusion of the related GAAP economics in subsequent periods; (v) unrealized gains or losses related to our investments in securities recorded at fair value in current period earnings; (vi) unrealized and realized provision for loan losses and real estate impairment; (vii) non-cash stock-based compensation; and (viii) certain non-recurring transactional items.
As of December 31, 2024, our off-balance sheet arrangements consisted of $34.6 million of unfunded commitments of mortgage loan receivables held for investment. 89% of these unfunded commitments require the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income.
As of December 31, 2025, our off-balance sheet arrangements consisted of $93.4 million of unfunded commitments of mortgage loan receivables held for investment. 49% of these unfunded commitments require the occurrence of certain “good news” events, such as the owner concluding a lease agreement with a major tenant in the building or reaching some pre-determined net operating income.
These mortgage loans have carrying amounts of $446.4 million and $437.8 million, net of unamortized premiums of $3.7 million and $1.8 million as of December 31, 2024 and December 31, 2023, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements.
These mortgage loans have carrying amounts of $388.2 million and $446.4 million, net of unamortized premiums of $3.1 million and $3.7 million as of December 31, 2025 and December 31, 2024, respectively, representing proceeds received upon financing greater than the contractual amounts due under these agreements.
The allowance includes $0.5 million and $0.7 million of reserves for unfunded commitments at December 31, 2024 and December 31, 2023, respectively. The estimate is sensitive to the assumptions used to represent future expected economic conditions.
The allowance includes $0.5 million of reserves for unfunded commitments at both December 31, 2025 and December 31, 2024. The estimate is sensitive to the assumptions used to represent future expected economic conditions.
As of December 31, 2024, we had outstanding borrowings secured by our mortgage loan receivables equal to 42.4% of the carrying value of our mortgage loan receivables, compared to 53.1% as of December 31, 2023. As of December 31, 2024 the weighted average yield on our securities was 6.0%, compared to 6.1% as of December 31, 2023.
As of December 31, 2024, we had outstanding borrowings secured by our mortgage loan receivables equal to 42.4% of the carrying value of our mortgage loan receivables. As of December 31, 2025, the weighted average yield on our securities was 5.3%, compared to 6.0% as of December 31, 2024.
There were $13.4 million of proceeds from sales of real estate, net for the year ended December 31, 2023. Other Potential Sources of Financing In the future, we may also use other sources of financing to fund the acquisition of our assets, including credit facilities, warehouse facilities, repurchase facilities and other secured and unsecured forms of borrowing.
There were $102.3 million of proceeds from sales of real estate, net of closing costs for the year ended December 31, 2024. Other Potential Sources of Financing In the future, we may also use other sources of financing to fund the acquisition of our assets, including credit facilities, warehouse facilities, repurchase facilities and other secured and unsecured forms of borrowing.
Impairments of intangibles are recorded in impairment of assets in our consolidated statements of income. 70 Table of Contents Impairment or Disposal of Long-lived Assets Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in real estate held for sale on our consolidated balance sheets.
Impairment or Disposal of Long-lived Assets Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in real estate held for sale on our consolidated balance sheets.
The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.8 million and $0.6 million of premium amortization, which decreased interest expense for the years ended December 31, 2024 and 2023, respectively.
The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $0.7 million of premium amortization, which decreased interest expense for each of the years ended December 31, 2025 and 2024.
For purposes of distributable earnings, we exclude the impact of unrealized lower of cost or market adjustments on conduit loans held for sale and include the realized gains or losses in distributable earnings in the period when the loan is sold.
Mortgage loans receivable held for sale are recorded at the lower of cost or market under GAAP. For purposes of distributable earnings, we exclude the impact of unrealized lower of cost or market adjustments on conduit loans held for sale and include the realized gains or losses in distributable earnings in the period when the loan is sold.
As of December 31, 2024, we did not have any borrowings against our securities. As of December 31, 2023, the weighted average interest rate on borrowings against our securities was 5.8%. As of December 31, 2023, we had outstanding borrowings secured by our securities equal to 24.0% of the carrying value of our real estate securities.
As of December 31, 2025, the weighted average interest rate on borrowings against our securities was 4.3%. As of December 31, 2024, we did not have any borrowings against our securities. As of December 31, 2025, we had outstanding borrowings secured by our securities equal to 30.0% of the carrying value of our real estate securities.
Committed Loan Facilities We are a party to multiple committed loan repurchase agreement facilities, totaling $1.2 billion of credit capacity as of December 31, 2024. As of December 31, 2024, the Company had $62.7 million of borrowings outstanding, with an additional $1.1 billion of committed financing available.
Committed Loan Financing Facilities The Company is a party to multiple committed loan repurchase agreement facilities, totaling $656.0 million of credit capacity as of December 31, 2025. As of December 31, 2025, the Company had no borrowings outstanding. As of December 31, 2024, the Company had $62.7 million of borrowings outstanding, with an additional $1.1 billion of committed financing available.
As of December 31, 2023, our off-balance sheet arrangements consisted of $204.0 million of unfunded commitments of mortgage loan receivables held for investment to provide additional first mortgage loan financing.
As of December 31, 2024, our off-balance sheet arrangements consisted of $34.6 million of unfunded commitments of mortgage loan receivables held for investment to provide additional first mortgage loan financing.
These unsecured financings were comprised of $295.7 million in aggregate principal amount of 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of 4.25% senior notes due 2027 (the “2027 Notes”) and $633.9 million in aggregate principal amount of 4.75% senior notes due 2029 and $500.0 million in aggregate principal amount of 7.00% senior notes due 2031 (the “2031 Notes”, collectively with the 2025 Notes, the 2027 Notes and the 2029 Notes, the “Notes”).
These unsecured financings were comprised of $295.7 million in aggregate principal amount of the 5.25% senior notes due 2025 (the “2025 Notes”), $611.9 million in aggregate principal amount of the 2027 Notes, $633.9 million in aggregate principal amount of the 2029 Notes and $500.0 million in aggregate principal amount of the 2031 Notes.
As of December 31, 2024, we had outstanding borrowings secured by our real estate equal to 66.6% of the carrying value of our real estate, compared to 60.3% as of December 31, 2023.
As of December 31, 2025, we had outstanding borrowings secured by our real estate equal to 55.2% of the carrying value of our real estate, compared to 66.6% as of December 31, 2024.
As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis.
The Company’s loans are typically collateralized by real estate directly or indirectly. As a result, the Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor on a loan-by-loan basis.
Cash Flows We held cash and cash equivalents of $1.3 billion and restricted cash of $12.6 million as of December 31, 2024. We held cash and cash equivalents of $1.0 billion and restricted cash of $15.4 million as of December 31, 2023.
We held cash and cash equivalents of $1.3 billion and restricted cash of $12.6 million as of December 31, 2024.
Proceeds from sales of securities provided net cash of $32.2 million for the year ended December 31, 2024, and $17.8 million for the year ended December 31, 2023. Proceeds from the Sale of Real Estate There were $102.3 million of proceeds from sales of real estate, net of closing costs for the year ended December 31, 2024.
Proceeds from sales of securities provided net cash of $411.8 million for the year ended December 31, 2025, and $32.2 million for the year ended December 31, 2024. Proceeds from the Sale of Real Estate There were $13.1 million of proceeds from sales of real estate, net of closing costs for the year ended December 31, 2025.
Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties.
Determining fair value of the collateral may take into account a number of assumptions including, but not limited to, cash flow projections, market capitalization rates, discount rates and data regarding recent comparable sales of similar properties. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.
The Revolving Credit Facility also allows the Company to enter into additional incremental revolving commitments up to an aggregate facility size of $1.25 billion subject to certain customary conditions. Borrowings under the Revolving Credit Facility bear interest at a rate equal to adjusted term SOFR plus a margin.
The Unsecured Revolving Credit Facility also allows the Company to enter into additional incremental revolving commitments up to an aggregate facility size of $1.3 billion, subject to certain customary conditions. Borrowings under the Unsecured Revolving Credit Facility bear interest at a rate equal to term SOFR plus a margin of 125 basis points as of December 31, 2025.
As of December 31, 2024, the weighted average yield on our mortgage loan receivables was 9.3%, compared to 9.6% as of December 31, 2023. As of December 31, 2024, the weighted average interest rate on borrowings against our mortgage loan receivables was 6.4%, compared to 7.5% as of December 31, 2023.
As of December 31, 2025, the weighted average yield on our mortgage loan receivables was 7.7%, compared to 9.3% as of December 31, 2024. As of December 31, 2025, we did not have any borrowings against our mortgage loan receivables. As of December 31, 2024, the weighted average interest rate on borrowings against our mortgage loan receivables was 6.4%.
Refer to Note 5, Real Estate and Related Lease Intangibles, Net, for further detail. Fee and Other Income We generate fee income on the loans we originate and in which we invest.
Refer to Note 5, Real Estate and Related Lease Intangibles, Net, for further detail. Fee and Other Income We generate fee income on the loans we originate and in which we invest and also include unrealized and realized gains and losses on securities within fee and other income.
The Company may redeem the Notes, in whole or in part, at any time, or from time to time, prior to their stated maturity upon not less than 10 nor more than 60 days’ notice, at a redemption price as specified in each respective indenture governing the Notes, plus accrued and unpaid interest, if any, to the redemption date.
The Company may redeem the Notes prior to their stated maturity, in whole or in part, at any time or from time to time, with required notice and at a redemption price as specified in each respective indenture governing the Notes, plus accrued and unpaid interest, if any, to the redemption date.
During the year ended December 31, 2024, we charged-off $5.0 million of an existing allowance related to an office property in Oakland, California. For additional information, refer to Note 3, Mortgage Loan Receivables, in the consolidated financial statements. The provision for the year ended December 31, 2023 was $25.1 million.
During the year ended December 31, 2024, we charged-off $5.0 million of an existing allowance related to an office property in Oakland, California. For additional information, refer to “Allowance for Credit Losses and Non-Accrual Status” in Note 3, Mortgage Loan Receivables, to the consolidated financial statements.
Repayment of mortgage loan receivables provided net cash of $1.6 billion for the year ended December 31, 2024 and $738.5 million for the year ended December 31, 2023. Repayment of real estate securities provided net cash of $276.6 million for the year ended December 31, 2024, and $232.1 million for the year ended December 31, 2023.
Repayment of mortgage loan receivables provided net cash of $711.0 million for the year ended December 31, 2025 and $1.6 billion for the year ended December 31, 2024. Repayment of real estate securities provided net cash of $534.0 million for the year ended December 31, 2025, and $276.6 million for the year ended December 31, 2024.
As of December 31, 2024, the Company has a remaining amount available for repurchase of $67.6 million, which represents 4.8% in the aggregate of its outstanding Class A common stock, based on the closing price of $11.19 per share on such date.
As of December 31, 2025, the Company has a remaining amount available for repurchase of $90.6 million, which represents 6.5% in the aggregate of its outstanding Class A common stock, based on the closing price of $10.99 per share on such date.
Because of these limitations, distributable earnings should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders or any other performance measures calculated in accordance with GAAP. Our non-GAAP financial measures should not be considered an alternative to cash flows from operations as a measure of our liquidity.
Because of these limitations, distributable earnings should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders or any other performance measures calculated in accordance with GAAP.
As of December 31, 2023, we held unencumbered cash and cash equivalents of $1.0 billion, unencumbered loans of $1.1 billion, unencumbered securities of $342.8 million, unencumbered real estate of $160.8 million and $394.2 million of other assets not encumbered by any portion of secured indebtedness.
Unencumbered Assets As of December 31, 2025, we held unencumbered cash and cash equivalents of $38.0 million, unencumbered loans of $2.2 billion, unencumbered securities of $1.4 billion, unencumbered real estate of $320.4 million and $109.7 million of other assets not encumbered by any portion of secured indebtedness.
The $23.6 million decrease in interest expense is primarily related to lower outstanding balances on our securities and loan repurchase facilities and the payoff of our FHLB borrowings as well as a reduction in expense as a result of redemptions of our Notes, partially offset by the issuance of our 2031 Notes.
The $46.6 million decrease in interest expense is primarily related to the redemption of all outstanding obligations of LCCM 2021-FL2 and LCCM 2021-FL3, lower outstanding balances on our loan repurchase facilities, the payoff of mortgage loan debt, as well as a reduction in expense as a result of redemptions of our Notes, partially offset by the issuance of our 2031 Notes.
Following the date on which the Company has received an investment grade rating from at least two rating agencies, the Revolving Credit Facility will be automatically amended, the pledge of the shares of (or other ownership or equity interest in) certain subsidiaries will be terminated, and each guarantor (other than Ladder Capital Corp and any subsidiary that is a trigger guarantor) will be released and discharged from all obligations as a guarantor and/or pledgor.
Effective May 27, 2025, the date on which the Company received investment grade ratings from Moody’s and Fitch, the Unsecured Revolving Credit Facility was automatically amended, the pledge of the shares of (or other ownership or equity interest in) certain subsidiaries was terminated, and each guarantor (other than Ladder Capital Corp and any subsidiary that is a trigger guarantor) was released and discharged from all obligations as a guarantor and/or pledgor.
The management team, in consultation with our board of directors, establishes our overall liquidity and capital allocation strategies. A key objective of those strategies is to support the execution of our business strategy while maintaining sufficient ongoing liquidity throughout the business cycle to service our financial obligations as they become due.
A key objective of those strategies is to support the execution of our business strategy while maintaining sufficient ongoing liquidity throughout the business cycle to service our financial obligations as they become due.
We were in compliance with all covenants as of December 31, 2024 and December 31, 2023. Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including pledges of the equity of certain subsidiaries or the assets of certain subsidiaries.
The Company was in compliance in all material respects with the covenants under the Company’s financing arrangements as of December 31, 2025 and December 31, 2024. Further, certain of our financing arrangements and loans on our real property are secured by the assets of the Company, including the assets of certain subsidiaries.
The following is an unaudited reconciliation of the related consolidated GAAP amounts to the amounts reflected in distributable earnings ($ in thousands): Year Ended December 31, December 31, 2024 2023 GAAP realized gain/loss on sale of real estate, net $ 25,277 $ 8,808 Adjusted gain/loss on sale of real estate for purposes of distributable earnings (7,010) (792) Accumulated depreciation and amortization on real estate sold $ 18,267 $ 8,016 73 Table of Contents (2) The following is an unaudited reconciliation of GAAP net results from derivative transactions to our adjustments for derivative results and loan sale activity within distributable earnings ($ in thousands): Year Ended December 31, December 31, 2024 2023 GAAP net results from derivative transactions $ (5,420) $ (1,481) Realized results of loan sales, net (a) (b) 2,856 — Unrealized lower of cost or market adjustments related to loans held for sale (30) 523 Amortization of (premium)/discount on mortgage loan financing included in interest expense (b) (767) (604) Recognized derivative results 5,366 1,674 Adjustments for derivative results and loan sale activity $ 2,005 $ 112 (a) Includes realized gains from sales of conduit mortgage loans collateralized by net lease properties in our real estate segment of $2.7 million and net hedge related gain on such mortgage loan sales of $0.2 million, for the twelve months ended December 31, 2024.
The following is an unaudited reconciliation of the related consolidated GAAP amounts to the amounts reflected in distributable earnings ($ in thousands): Year Ended December 31, December 31, 2025 2024 GAAP realized gain/loss on sale of real estate, net $ 3,807 $ 25,277 Adjusted (gain)/loss on sale of real estate for purposes of distributable earnings (871) (7,010) Accumulated depreciation and amortization on real estate sold $ 2,936 $ 18,267 (2) The following is an unaudited reconciliation of GAAP net results from derivative transactions to our adjustments for derivative results and loan sale activity within distributable earnings ($ in thousands): Year Ended December 31, December 31, 2025 2024 GAAP net results from derivative transactions $ (1,835) $ (5,420) Realized results of loan sales, net (a) 1,504 2,856 Unrealized lower of cost or market adjustments related to loans held for sale (1,088) (30) Amortization of (premium)/discount on mortgage loan financing included in interest expense (652) (767) Recognized derivative results 1,570 5,366 Adjustments for derivative results and loan sale activity $ (501) $ 2,005 (a) Represents the net hedge related gain on conduit sales for the twelve months ended December 31, 2025.
Net Result from Derivative Transactions Net result from derivative transactions of $5.4 million was comprised of a realized gain of $7.3 million and an unrealized loss of $1.9 million for the year ended December 31, 2024.
Net Result from Derivative Transactions Net result from derivative transactions of $1.8 million was comprised of a realized gain of $2.0 million and an unrealized loss of $(0.2) million for the year ended December 31, 2025.
If we determine the carrying value of an intangible asset is not recoverable, we will record an impairment charge to the extent its carrying value exceeds its estimated fair value.
If we determine the carrying value of an intangible asset is not recoverable, we will record an impairment charge to the extent its carrying value exceeds its estimated fair value. Impairments of intangibles are recorded in impairment of assets in our consolidated statements of income.
Proceeds from Securitizations and Sales of Loans We sell our conduit mortgage loans to securitization trusts and to other third parties as part of our normal course of business and from time to time will sell balance sheet mortgage loans.
Proceeds from Securitizations and Sales of Loans We sell our conduit mortgage loans to securitization trusts and to other third parties as part of our normal course of business and from time to time will sell balance sheet mortgage loans. There were $66.8 million of proceeds from sales of mortgage loans for the year ended December 31, 2025.
The provision for loan losses for the year ended December 31, 2024 and December 31, 2023 was $13.9 million and $25.1 million, respectively. The allowance for loan losses at December 31, 2024 and December 31, 2023 was $52.8 million and $43.9 million, respectively.
The provision for loan losses for the year ended December 31, 2025 and December 31, 2024 was $(0.2) million and $13.9 million, respectively. The allowance for loan losses at December 31, 2025 and December 31, 2024 was $47.7 million and $52.8 million, respectively.
There was a $1.1 billion decrease in average loan investments from $3.6 billion for the year ended December 31, 2023 to $2.5 billion for the year ended December 31, 2024. There was a $151.9 million increase in average securities investments from $495.5 million for the year ended December 31, 2023 to $647.4 million for the year ended December 31, 2024.
There was a $0.7 billion decrease in average loan investments from $2.5 billion for the year ended December 31, 2024 to $1.8 billion for the year ended December 31, 2025. There was a $1.1 billion increase in average securities investments from $0.6 billion for the year ended December 31, 2024 to $1.7 billion for the year ended December 31, 2025.
The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash ($ in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in) operating activities $ 133,921 $ 180,604 Net cash provided by (used in) investing activities 932,761 793,503 Net cash provided by (used in) financing activities (796,586) (557,766) Net increase (decrease) in cash, cash equivalents and restricted cash $ 270,096 $ 416,341 Year ended December 31, 2024 We experienced a net increase in cash, cash equivalents and restricted cash of $270.1 million for the year ended December 31, 2024, reflecting cash provided by operating activities of $133.9 million, cash provided by investing activities of $932.8 million and cash used in financing activities of $(796.6) million.
The following table provides a breakdown of the net change in our cash, cash equivalents, and restricted cash ($ in thousands): Year Ended December 31, 2025 2024 Net cash provided by (used in) operating activities $ 87,019 $ 133,921 Net cash provided by (used in) investing activities (1,607,259) 932,761 Net cash provided by (used in) financing activities 227,042 (796,586) Net increase (decrease) in cash, cash equivalents and restricted cash $ (1,293,198) $ 270,096 Year ended December 31, 2025 We experienced a net decrease in cash, cash equivalents and restricted cash of $(1.3) billion for the year ended December 31, 2025, reflecting cash provided by operating activities of $87.0 million, cash used in investing activities of $(1.6) billion and cash provided by financing activities of $227.0 million.
We believe that our in-house origination platform, ability to flexibly allocate capital among complementary product lines, credit-centric underwriting approach, access to diversified financing sources, and experienced management team position us well to deliver attractive returns on equity to our shareholders through economic and credit cycles. 57 Table of Contents Results of Operations A discussion regarding our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
We believe that our in-house origination platform, ability to flexibly allocate capital among complementary product lines, credit-centric underwriting approach, access to diversified financing sources, and experienced management team position us well to deliver attractive returns on equity to our shareholders through economic and credit cycles.
All of our existing financial obligations due within the following year can be extended for one or more additional years at our discretion, refinanced or repaid at maturity or are incurred in the normal course of business (i.e., interest payments/loan funding obligations).
All of our existing financial obligations due within the following year can be extended for one or more additional years at our discretion, refinanced or repaid at maturity or are incurred in the normal course of business (i.e., interest payments/loan funding obligations). 62 Table of Contents Cash Flows We held cash and cash equivalents of $38.0 million and restricted cash of $14.9 million as of December 31, 2025.
Liquidity and Capital Resources The management of our liquidity and capital diversity and allocation strategies is critical to the success and growth of our business. We manage our sources of liquidity to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties. We require substantial amounts of capital to support our business.
We manage our sources of liquidity to complement our asset composition and to diversify our exposure across multiple capital markets and counterparties. We require substantial amounts of capital to support our business. The management team, in consultation with our board of directors, establishes our overall liquidity and capital allocation strategies.
For purposes of distributable earnings, management recognizes loan and real estate losses as being realized generally in the period in which the asset is sold or the Company determines a decline in value to be non-recoverable and the loss to be nearly certain. 72 Table of Contents Set forth below is an unaudited reconciliation of income (loss) before taxes to distributable earnings (in thousands): Year Ended December 31 December 31 2024 2023 Income (loss) before taxes $ 110,895 $ 104,745 Net (income) loss attributable to noncontrolling interests in consolidated ventures 808 624 Our share of real estate depreciation, amortization and gain adjustments (1) 11,558 18,602 Adjustments for derivative results and loan sale activity (2) 2,005 112 Unrealized (gain) loss on fair value securities 925 (29) Adjustment for impairment (3) 13,933 25,096 Non-cash stock-based compensation 18,829 18,577 Distributable earnings prior to charge-off of allowance for credit losses $ 158,953 $ 167,727 Charge-off of allowance for credit losses (3) (5,023) — Distributable earnings $ 153,930 $ 167,727 (1) The following is an unaudited reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investment in unconsolidated ventures in excess of distributions received ($ in thousands): Year Ended December 31, December 31, 2024 2023 Total GAAP depreciation and amortization $ 32,327 $ 29,914 Depreciation and amortization related to non-rental property fixed assets (440) (431) Non-controlling interests in consolidated ventures’ share of depreciation and amortization (441) (410) Our share of operating lease income from above/below market lease intangible amortization (1,700) (1,797) Our share of real estate depreciation and amortization 29,746 27,276 Accumulated depreciation and amortization on real estate sold (a) (18,267) (8,016) Adjustment for (earnings) loss from investments in unconsolidated ventures in excess of distributions received 79 (658) Our share of real estate depreciation, amortization and gain adjustments $ 11,558 $ 18,602 (a) GAAP gains/losses on sales of real estate include the effects of previously-recognized real estate depreciation and amortization.
Set forth below is an unaudited reconciliation of income (loss) before taxes to distributable earnings (in thousands): Year Ended December 31 December 31 2025 2024 Income (loss) before taxes $ 67,188 $ 110,895 Net (income) loss attributable to noncontrolling interests in consolidated ventures 487 808 Our share of real estate depreciation, amortization and real estate sale adjustments (1) 28,254 11,558 Adjustments for derivative results and loan sale activity (2) (501) 2,005 Unrealized (gain) loss on securities (749) 925 Adjustment for impairment (157) 13,933 Non-cash stock-based compensation 20,329 18,829 Distributable earnings prior to charge-off of allowance for credit losses $ 114,851 $ 158,953 Charge-off of allowance for credit losses (3) (5,000) (5,023) Distributable earnings $ 109,851 $ 153,930 (1) The following is an unaudited reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investment in unconsolidated ventures in excess of distributions received ($ in thousands): Year Ended December 31, December 31, 2025 2024 Total GAAP depreciation and amortization $ 31,995 $ 32,327 Depreciation and amortization related to non-rental property fixed assets (445) (440) Non-controlling interests in consolidated ventures’ share of depreciation and amortization (481) (441) 73 Table of Contents Our share of operating lease income from above/below market lease intangible amortization (1,294) (1,700) Our share of real estate depreciation and amortization 29,775 29,746 Adjustments for accumulated depreciation and amortization on real estate sold (a) (2,936) (18,267) Adjustment for (earnings) loss from investments in unconsolidated ventures in excess of distributions received 1,415 79 Our share of real estate depreciation, amortization and real estate sale adjustments $ 28,254 $ 11,558 (a) GAAP gains/losses on sales of real estate include the effects of previously-recognized real estate depreciation and amortization.
Net cash used in financing activities of $(557.8) million was primarily as a result of net repayments of borrowings of $(427.1) million, $(116.4) million of dividend payments, $(7.9) million of shares acquired to satisfy minimum federal and state tax withholdings on restricted stock, $(2.5) million purchase of treasury stock, and $(3.4) million in deferred financing cost.
Net cash provided by financing activities of $227.0 million was primarily as a result of net repayments of borrowings of $376.9 million, $(117.4) million of dividend payments, $(8.7) million payment to satisfy minimum federal and state tax withholdings on restricted stock, $(11.8) million purchase of treasury stock, and $(12.0) million in deferred financing cost.
Activity for the year ended December 31, 2023 included securities purchases of $144.0 million, sales of $17.8 million and $232.1 million of amortization and paydowns, which 58 Table of Contents contributed to a net decrease in our securities portfolio of $102.0 million.
Activity for the year ended December 31, 2025 included securities purchases of $1.9 billion, $534.8 million of amortization and paydowns, and sales of $411.8 million, which contributed to a net increase in our securities portfolio of $1.0 billion.
Unamortized debt issuance costs of $0.1 million were included in CLO debt as of December 31, 2024. As of December 31, 2023, the Company had $1.1 billion of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets.
As of December 31, 2025, the Company did not have any CLO debt included in debt obligations on its consolidated balance sheets. As of December 31, 2024, the Company had $601.4 million of matched term, non-mark-to-market and non-recourse CLO debt included in debt obligations on its consolidated balance sheets.
The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date, however, we may be obligated to fund these commitments earlier than such date.
(4) Comprised primarily of our off-balance sheet unfunded commitment to provide additional first mortgage loan financing as of December 31, 2025. The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the final maturity date, however, we may be obligated to fund these commitments earlier than such date.
Unencumbered Assets As of December 31, 2024, we held unencumbered cash of $1.3 billion, unencumbered loans of $689.7 million, unencumbered securities of $1.1 billion, unencumbered real estate of $213.4 million and $409.1 million of other assets not encumbered by any portion of secured indebtedness.
As of December 31, 2024, we held unencumbered cash and cash equivalents of $1.3 billion, unencumbered loans of $689.7 million, unencumbered securities of $1.1 billion, unencumbered real estate of $213.4 million and $409.1 million of other assets not encumbered by any portion of secured indebtedness. 63 Table of Contents Borrowings under various financing arrangements Our financing strategies are critical to the success and growth of our business.
Proceeds from the Sale of Securities We sell our investments in CMBS, including CRE CLOs, U.S. Agency securities, corporate bonds, U.S. Treasury securities, and equity securities as a part of our normal course of business.
There were $82.5 million of proceeds from sales of mortgage loans for the year ended December 31, 2024. 67 Table of Contents Proceeds from the Sale of Securities We sell our investments in CMBS, including CRE CLOs, U.S. Agency securities, corporate bonds, U.S. Treasury securities, and equity securities as a part of our normal course of business.
The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool.
The CECL model requires the consideration of possible credit losses over the life of an instrument and includes a portfolio-based component and an asset-specific component. The Company engages a third-party service provider to provide market data and a credit loss model. The credit loss model is a forward-looking, econometric, commercial real estate (“CRE”) loss forecasting tool.
Gain (Loss) on Real Estate, net The increase of $16.5 million of gain on real estate, net during the year ended December 31, 2024 compared to the year ended December 31, 2023 was the result of property sales during the year ended December 31, 2024 compared to property sales during the year ended December 31, 2023.
Gain (Loss) on Real Estate, net The decrease of $21.5 million of gain on real estate, net during the year ended December 31, 2025 compared to the year ended December 31, 2024 was the result of one property sale for a gain of $3.8 million during the year ended December 31, 2025 compared to 14 property sales for a gain of $25.3 million during the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Risks Related to Real Estate Real estate and real estate-related assets, including loans and commercial real estate-related securities, are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; environmental conditions; competition from comparable property types or properties; changes in tenant mix or performance and retroactive changes to building or similar codes and rent regulations.
Risks Related to Real Estate Real estate and real estate-related assets, including loans and commercial real estate-related securities, are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns, economic downturns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; environmental conditions; competition from comparable property types or properties; changes in tenant mix or performance and retroactive changes to building or similar codes and rent regulations.
A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability 75 Table of Contents of observable transaction data and inputs, may make it more difficult to sell the Company’s investments or determine their fair values.
A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability 76 Table of Contents of observable transaction data and inputs, may make it more difficult to sell the Company’s investments or determine their fair values.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk For a discussion of current market conditions, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Interest Rate Risk The nature of the Company’s business exposes it to market risk arising from changes in interest rates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk For a discussion of current market conditions, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Interest Rate Risk The nature of the Company’s business exposes it to market risk arising from changes in interest rates.
Agency securities portfolio, and other securities if long enough in duration.
Agency securities, and other securities if long enough in duration.
Our portfolio’s low weighted average loan-to-value, based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, of 66.5% as of December 31, 2024 reflects significant equity value that our sponsors are motivated to protect through periods of cyclical disruption.
Our portfolio’s low weighted average loan-to-value, based on the loan balances and the “as-is” third-party Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) appraised values at origination, of 68.7% as of December 31, 2025 reflects significant equity value that our sponsors are motivated to protect through periods of cyclical disruption.
We may become subject to additional regulatory and compliance burdens if our investment adviser subsidiary expands its product offerings and investment platform. 77 Table of Contents
We may become subject to additional regulatory and compliance burdens if our investment adviser subsidiary expands its product offerings and investment platform.
The following table summarizes the change in net income for a 12-month period commencing December 31, 2024 and the change in fair value of our investments and indebtedness assuming an increase or decrease of 100 basis points in the relevant benchmark interest rates on December 31, 2024, both adjusted for the effects of our interest rate hedging activities ($ in thousands): Projected change in net income(1) Projected change in portfolio value Change in interest rate: Decrease by 1.00% $ (28,146) $ 8,130 Increase by 1.00% 28,576 (7,960) (1) Subject to limits for floors on our floating rate investments and indebtedness.
The following table summarizes the change in net income for a 12-month period commencing December 31, 2025 and the change in fair value of our investments and indebtedness assuming an increase or decrease of 100 basis points in the relevant benchmark interest rates on December 31, 2025, both adjusted for the effects of our interest rate hedging activities ($ in thousands): Projected change in net income(1) Projected change in portfolio value Change in interest rate: Decrease by 1.00% $ (25,737) $ 3,990 Increase by 1.00% 32,124 (3,895) (1) Subject to limits for floors on our floating rate investments and indebtedness.
A decrease in the market value of the Company’s assets may result in the lender requiring it to post additional collateral or otherwise sell assets at a time when it may not be in the Company’s best interest to do so.
A decrease in the market value of the Company’s assets may result in the lender requiring it to post additional collateral or otherwise sell assets at a time when it may not be in the Company’s best interest to do so. Credit Risk The Company is subject to varying degrees of credit risk in connection with its investments.
We were in compliance with all covenants as described in this Annual Report as of December 31, 2024. 76 Table of Contents Diversification Risk The Company’s investments include mortgage loan receivables collateralized by commercial real estate, owned real estate and real estate backed securities.
The Company was in compliance in all material respects with the covenants under the Company’s financing arrangements as described in this Annual Report as of December 31, 2025. 77 Table of Contents Diversification Risk The Company’s investments include mortgage loan receivables collateralized by commercial real estate, owned real estate and real estate backed securities.
Effective as of July 16, 2021, LCAM is a registered investment adviser under the Investment Advisors Act of 1940, as amended and currently provides investment advisory services solely to Ladder-sponsored collateralized loan obligation trusts (“CLO Issuers”).
Regulatory Risk Effective as of July 16, 2021, LCAM is a registered investment adviser under the Investment Advisors Act of 1940, as amended. During the year, LCAM provided investment advisory services solely to Ladder-sponsored collateralized loan obligation trusts (“CLO Trusts”). As of June 30, 2025, LCAM redeemed both CLO Trusts.
If such events are not cured by the Company or waived by the lenders, the lenders may decide to curtail or limit extension of credit, and the Company may be forced to repay its advances or loans.
If such events are not cured by the Company or waived by the lenders, the lenders may decide to curtail or limit extension of credit, and the Company may be forced to repay its advances or loans. In addition, the Company’s Notes are subject to covenants, including maintenance of unencumbered assets and limitations on the incurrence of additional debt.
A registered investment adviser is subject to U.S. federal and state laws and regulations primarily intended to benefit its clients.
As a result of these redemptions, LCAM no longer has any advisory clients or regulatory assets under management. LCAM is eligible to retain its SEC registration status until June 30, 2026, while it assesses future investment advisory services. A registered investment adviser is subject to U.S. federal and state laws and regulations primarily intended to benefit its clients.
Removed
The Company’s captive insurance company subsidiary, Tuebor, is subject to state regulations which require that dividends may only be made with regulatory approval, limiting the Company’s ability to utilize cash held by Tuebor. Credit Risk The Company is subject to varying degrees of credit risk in connection with its investments.
Removed
In addition, the Company’s Notes are subject to covenants, including maintenance of unencumbered assets, limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type.
Removed
Regulatory Risk Tuebor is subject to state regulation as a captive insurance company. If Tuebor fails to comply with regulatory requirements, it could be subject to loss of its licenses and registration and/or economic penalties.
Removed
The CLO Issuers invest primarily in first mortgage loans secured by commercial real estate originated or acquired by Ladder and in participation interests in such loans.
Removed
LCAM is entitled to receive a management fee connection with the advisory, administrative and monitoring services it performs for the CLO Issuer as the collateral manager; however, LCAM has waived this fee for so long as it or any of its affiliates serves as collateral manager for the CLO Issuers.

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