Ladder Capital NYSE: LADR reported what executives described as a strong start to 2026, pointing to increased loan originations, growing distributable earnings, and expanded unsecured funding capacity as it continues shifting capital from securities into its balance sheet loan portfolio.
First-quarter earnings and portfolio growth
President Pamela McCormack said Ladder generated first-quarter distributable earnings of $28 million, or $0.22 per share, alongside what she characterized as “robust origination activity and earnings growth.” The company’s stated near-term strategy, McCormack said, is to “grow Distributable Earnings and deliver attractive risk-adjusted returns to shareholders across cycles.”
McCormack said the company has expanded its loan portfolio significantly, noting that since March 31, 2025, Ladder has grown the loan portfolio by nearly 60%. Balance sheet loans now represent 46% of total assets, she added, while leverage is “moving back towards 3x.”
She said elevated payoffs over the past two years helped the company rotate out of legacy exposures and into newly originated loans at attractive loan-to-value ratios “on reset bases,” which she described as a key contributor to stable book value. With payoffs “now normalizing,” McCormack said net portfolio growth is accelerating and the company expects that trend to continue.
Origination activity, investment mix, and second-quarter momentum
McCormack said Ladder deployed about $900 million into new investments in the first quarter, including more than $620 million in new loans with a weighted average spread of 300 basis points and $264 million in securities with a weighted average yield of 5.22%. She said the company remains focused on middle-market, income-producing collateral, “primarily multifamily and industrial properties,” while also seeing selective opportunities in other asset classes amid higher macro volatility.
She specifically pointed to office as an area where “dislocation is allowing us to lend against high-quality credit at wider spreads without compromising our underwriting standards.”
Momentum carried into the second quarter, she said. “Through mid-April, we’ve closed over $370 million in new loans,” McCormack told listeners, adding that—aside from one large payoff discussed later on the call—loan payoffs for the remainder of the year are expected to be limited, supporting continued portfolio growth and revenue expansion.
Funding, liquidity, and capital actions
CFO Paul Miceli said Ladder raised $675 million of new unsecured capital commitments during the quarter, including:
- A $400 million “full accordion expansion” of its unsecured revolving credit facility, increasing total capacity to $1.25 billion and adding three new banks to the syndicate.
- A new unsecured delayed-draw term loan facility of $275 million, with an accordion feature that can increase total capacity to up to $500 million.
Miceli said the term loan is priced at 140 basis points over SOFR, steps down upon credit rating upgrades, and has a February 2030 fully extended maturity. He said Ladder expects to fully draw the term loan in the second quarter to fund loan origination.
Miceli also noted that S&P upgraded Ladder’s credit rating to BB+ during the quarter, which he said is one notch below the investment-grade ratings Ladder has with Moody’s and Fitch. As of quarter-end, Miceli said adjusted leverage was 2.3x, and liquidity totaled $1.1 billion, including same-day capacity on the unsecured revolver and undrawn term loan.
Miceli said Ladder’s unencumbered asset pool was 73% of total assets at March 31, with 85% of that pool comprised of first mortgage loans, investment-grade securities, and unrestricted cash and cash equivalents. He reported undepreciated book value per share of $13.42, net of $0.37 per share of CECL reserve.
In capital allocation, Miceli said Ladder repurchased $13.4 million of common stock, or 1.3 million shares, at a weighted average share price of $10.15. He said $77 million remained under the repurchase program as of March 31, and that the board increased the authorization back to $100 million after quarter-end in April.
Miceli said the company declared a $0.23 per share dividend in the first quarter, paid April 15, 2026. Looking ahead, he said management intends to expand dividend coverage as the loan portfolio scales and interest income grows, “positioning us for potential dividend growth as we approach full deployment.”
Credit performance and asset resolution activity
On credit, Miceli said Ladder added no new non-accrual loans in the first quarter and ended the period with one $51 million loan on non-accrual status. He also said the company resolved three non-accrual loans through foreclosure, including:
- A loan with a $62 million carrying value, collateralized by a three-property, 158-unit multifamily portfolio in East Harlem, New York City, currently 88% occupied.
- A loan with a $12 million carrying value, collateralized by a 150-room Courtyard by Marriott hotel in Canton, Ohio; Miceli said Ladder extended the Marriott franchise agreement by 15 years to a new 17-year term at the time of foreclosure.
- A loan with a $6 million carrying value, collateralized by an office property in Portland, Oregon, with a basis of $85 per square foot.
Miceli said Ladder plans to stabilize these assets and maximize value for potential sales in the future. He said the CECL reserve remained steady at $47 million, or $0.37 per share, and management believes the reserve is sufficient given the current loan portfolio and macroeconomic backdrop, including geopolitical uncertainty.
Management commentary on markets: securities rotation, office opportunities, and bank competition
During the Q&A, management said it expects distributable earnings to exceed the dividend “next quarter,” in response to a question from KBW’s Jade Rahmani. Asked about target loan portfolio size, management said it does not have a specific target, but expects continued rotation out of securities and into loans, depending on market spreads. Management added that it would “ideally” ultimately have no securities and convert approximately $1 billion of unencumbered securities from a roughly 5.3% average yield to “something in the near 7% area” in the loan portfolio.
Miceli said the $2.1 billion securities portfolio had a weighted average yield of 5.3%, with 99% investment grade and 96% AAA-rated. He noted that about $1 billion, or roughly half, was unencumbered as of quarter-end.
Management also discussed recent market volatility and capital allocation. The company sold $152 million of securities at a weighted average spread of 131 basis points and received $125 million in securities payoffs during the quarter, but then “pivoted” in March as spreads widened and acquired $264 million of securities at an average spread of 149 basis points. Management said that if levered, the return on equity would exceed 14%.
On office exposure, management reiterated that it manages risk rather than targeting a specific sector concentration. Management said office presents “great danger and great opportunity,” citing examples including the payoff of a large Miami office loan and a new first mortgage loan of roughly $275 million tied to an acquisition of an office and retail complex on Fifth Avenue in Manhattan at 66% loan-to-cost.
In discussing lending conditions, management described an “interesting bifurcation” between acquisitions and refinancings, calling the refinance market “pretty messy” with over-leveraged inventory, particularly for 2021 and 2022 vintages. Management said it generally prefers the acquisition side, where prices are known and the market has reset more visibly, especially in office and, increasingly, multifamily.
Asked about competition, management said banks are returning to the market, particularly on smaller loans under $20 million, but said Ladder does not intend to “start chasing price.” Management also said it is seeing opportunities to refinance construction loans on newly built apartment properties moving through lease-up, a segment it described as offering fewer operational surprises due to reduced near-term capital expenditure needs.
In closing remarks, management thanked investors for their patience with its deployment strategy, reiterated that it is “on offense,” and said it is seeing contributions from “all of our products” into distributable earnings, while noting that geopolitical events remain a factor to monitor.
About Ladder Capital NYSE: LADR
Ladder Capital Corp NYSE: LADR is a publicly traded commercial real estate finance company structured as a real estate investment trust. The firm specializes in originating, acquiring and managing a diversified portfolio of commercial mortgage loans, subordinate financings such as mezzanine loans and B-notes, and equity investments. In addition to direct lending activities, Ladder Capital invests in and manages commercial mortgage‐backed securities (CMBS) and commercial real estate collateralized loan obligations (CRE CLOs), providing financing across a range of property types including office, retail, multifamily, industrial and hospitality assets.
Since its inception in 2008, Ladder Capital has developed a platform that supports both balance-sheet lending and structured securitization.
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