Sunrise Realty Trust NASDAQ: SUNS reported first-quarter 2026 distributable earnings that exceeded its quarterly dividend, as management cited loan originations, repayments and fee income as drivers of results while outlining a continued focus on transitional commercial real estate lending in southern U.S. markets.
Executive Chairman Leonard Tannenbaum said Sunrise generated distributable earnings of $0.35 per share for the quarter ended March 31, covering the company’s $0.30 per-share dividend. He said the quarter benefited from a short-term loan on a Colorado property, new deal closings and the payoff of a loan tied to a multifamily property in Dallas.
“We were pleased with our first quarter results, which reflected the continued earnings power of our portfolio,” Tannenbaum said, adding that the results also showed the company’s ability to recycle capital through repayments and new originations at what management views as attractive risk-adjusted returns.
Portfolio Activity and First-Quarter Results
During the quarter, the TCG Real Estate platform originated $91 million of loans, of which Sunrise committed $62 million across two loans, Chief Executive Officer Brian Sedrish said. Those commitments included $14 million of a $22 million senior bridge loan financing the acquisition of an 11,000-acre portion of Silver Mountain Ranch in Colorado. That loan was originated, closed and exited during the quarter. Sunrise also committed $48 million of a $69 million B-note as part of a $406 million refinancing of a 15-property portfolio of Graduate by Hilton hotels for AJ Capital Partners.
Sedrish said Sunrise funded $90 million of new and existing loans during the quarter and received $70 million of repayments, including full repayment on the Silver Mountain Ranch and Bohème loans. Subsequent to quarter-end, the Jovie Belterra loan was fully repaid.
Management reported net interest income of $7.3 million, distributable earnings of $4.7 million, or $0.35 per basic weighted average common share, and GAAP net income of $4.3 million, or $0.32 per basic weighted average common share. The quarter included one-time fees from two investments: a $400,000 fee on the short-term Silver Mountain Ranch bridge loan and a $1.2 million prepayment fee on the Bohème loan.
As of March 31, Sunrise had $397.1 million of current commitments and $299.3 million of principal outstanding across 15 loans. As of May 8, the portfolio stood at $380.2 million of current commitments and $292.1 million of principal outstanding across 14 loans. Management said all loans were current and performing, with a weighted average portfolio yield to maturity of about 12.4%.
The company ended the quarter with total assets of $330 million and total shareholders’ equity of $182.5 million, equal to book value of $13.50 per share. Its CECL reserve was approximately $550,000, or 19 basis points of loans at carrying value. The board declared a $0.30 dividend for the quarter, paid April 15 to shareholders of record as of March 31.
San Antonio Hotel Asset Remains on the Market
Tannenbaum said Sunrise completed the foreclosure of its loan secured by Thompson San Antonio, a 162-key Class A hotel in Texas. He said the company believes it is now better positioned to evaluate alternatives because the asset is no longer subject to the former sponsor’s hotel management agreement and brand affiliation.
Shortly after taking title, Sunrise engaged Eastdil to market the asset. Tannenbaum said the first round of bidding recently concluded and the company received multiple attractive offers. He said a potential transaction could be structured as an all-cash sale or as a sale that includes lower-leverage seller financing from Sunrise and its affiliates, along with a meaningful equity contribution from the buyer.
In response to a question from Alliance Global Partners analyst Gaurav Mehta, Sedrish said the asset remains on the market and that no offer has been accepted. He said Sunrise is evaluating multiple opportunities and will update investors after accepting an offer.
Asked by KBW analyst Jason Sabshon about income from the San Antonio joint venture, Sedrish said Sunrise did not receive income from the hotel in the first quarter and does not expect income from it in the current quarter. He said a resolution could occur over the next couple of quarters, but the company does not anticipate income from the hotel until it is sold or a note is attached to it.
Lending Market Remains Split Between Acquisitions and Refinancings
Sedrish said Sunrise has built its loan book around transitional real estate business plans in growing southern markets, with a focus on sponsors and projects requiring structuring expertise. He said acquisition financing remains more straightforward where asset cost bases have been reset to current market conditions, while refinancing opportunities remain harder to price because fewer comparable assets are trading.
“Acquisitions where the cost basis has been reset to today’s market are generally where the underwriting works most cleanly and where we have been most active,” Sedrish said.
He said Sunrise is finding some refinancing opportunities where incumbent senior lenders are forcing sponsors to find replacement capital. In the Q&A, he said refinancing situations can be attractive when sponsors are required to inject additional equity to carry assets through to stabilization.
Sedrish also noted volatility in the quarter tied primarily to geopolitical developments, with Treasury yields rising and securitization spreads widening before partially retracing. He said sponsor inquiry activity remained healthy, though some transactions paused while parties reassessed cost of capital. By quarter-end, activity had largely normalized.
Management said regional banks have returned to smaller, simpler stabilized deals, while larger debt funds and commercial mortgage REITs are competing for stabilized multifamily and industrial loans. Sedrish said that is not Sunrise’s focus, as the company is targeting less trafficked transitional business plans that require local market knowledge, structuring and asset-level conviction.
Capital Deployment Focused on Southern Markets
Sunrise continues to emphasize Florida, the Southeast and Texas, while remaining selective in other markets. Sedrish said Florida and the broader Southeast remain constructive across most asset classes, supported by in-migration and employment growth. He said major Texas markets are showing signs of residential tightening, while some Western Sun Belt markets continue to absorb excess supply.
In response to Mehta, Sedrish said he expects the “huge majority” of future deals to remain in Sunrise’s core southern markets, though the company may pursue opportunistic deals elsewhere.
Asked by B. Riley Securities analyst Timothy D’Agostino what would cause Sunrise to increase its deal selectivity rate, Sedrish cited two factors: more opportunities involving discounted loans and discounted payoffs, and a sustained increase in acquisition volume. He said lower and more stable rates could lead to more investment activity, particularly in transitional loans.
On the balance sheet, Tannenbaum said there is “nothing else on watch list” beyond the San Antonio matter, adding that portfolio assets are performing within the company’s plan.
Looking ahead, Sedrish said Sunrise remains focused on disciplined origination, active portfolio management and prudent capital allocation. Management did not provide specific distributable earnings guidance, but said the board evaluates the dividend based on the medium-term earnings power of the portfolio, expected fundings, repayments, leverage capacity and forward originations.
About Sunrise Realty Trust NASDAQ: SUNS
Sunrise Realty Trust is a real estate investment trust (REIT) that focuses on acquiring, owning and leasing convenience store and fuel retail properties under long-term net leases. The company targets sale-leaseback transactions and joint-venture investments with high-credit tenants in the convenience retail sector. Sunrise Realty Trust's portfolio comprises single-tenant properties that benefit from predictable cash flows, structured lease agreements and tenant-driven site improvements, providing exposure to a segment of the retail real estate market that aligns closely with consumer essentials.
The company's primary business activities include sourcing and underwriting new property investments, negotiating sale-leaseback and ground lease transactions, and managing asset performance throughout the lease term.
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