Ladder Capital NYSE: LADR reported third-quarter 2026 distributable earnings of $44.7 million, or $0.35 per share, supported by a $31 million gain on the sale of its largest net-lease asset, an office campus in Jacksonville, Florida.
President Pamela McCormack said the Jacksonville transaction, along with the payoff of the company’s largest legacy office loan in Miami during the second quarter, reflected Ladder’s effort to unlock value from its real estate portfolio while reducing legacy exposure. The Jacksonville sale generated an 18% internal rate of return over the life of the investment and was completed above the property’s carrying value, she said.
Undepreciated book value per share rose to $13.50 at Sept. 30 from $13.44 in the prior quarter. Ladder repurchased $8.2 million of common stock, or 871,000 shares, during the quarter at a weighted average price of $9.38 per share. The company said it had $83.8 million remaining under its repurchase authorization at quarter-end.
Loan and Securities Growth
Ladder made $703 million of new investments during the quarter, including $481 million of predominantly AAA-rated securities and seven new balance-sheet loans totaling $222 million. After payoffs, sales and amortization, its combined loan and securities portfolios increased by about $570 million.
Year to date, the company originated $1.4 billion of new loans, matching its full-year 2025 volume, according to McCormack. The loan portfolio has increased more than 50% over the past 12 months, and balance-sheet loans now account for about half of total assets.
Management said approximately 90% of loans were originated since late 2024, when rates were higher and property values had reset. During the question-and-answer session, McCormack said 99% of Ladder’s multifamily loans were originated after late 2024. The company has one legacy multifamily loan, with a $10.2 million balance, that it expects may result in Ladder taking title, though it does not expect an impairment.
Chief Executive Officer Brian Harris said higher interest rates and market volatility slowed acquisition and refinancing activity in September, prompting the company to put more capital into securities. He said transactions under contract have faced delays or repricing as borrowers seek lower purchase prices in response to higher borrowing costs.
The securities portfolio totaled $2.3 billion at quarter-end, or 37% of total assets, and carried a weighted average yield of 5.5%. The portfolio was 99% investment grade, 97% AAA rated and 96% floating rate, with an average duration of about three years. Ladder continued purchasing securities into October, management said.
Balance Sheet Positioned for Higher Rates
CFO Paul Miceli said Ladder ended the quarter with adjusted leverage of 2.5 times, $784 million of liquidity, including same-day capacity on its unsecured revolving credit facility, and $1.2 billion of unencumbered primarily AAA-rated securities. Unsecured debt represented 69% of total debt.
As of Sept. 30, 57% of the company’s debt was fixed rate, primarily unsecured corporate bonds with a weighted average coupon of 5.3%. Meanwhile, 92% of its interest-earning assets, or $4.8 billion, were floating rate. Based on the quarter-end balance sheet, Miceli said a 25-basis-point increase in SOFR would add about $0.01 per share per quarter to distributable earnings.
Harris said the company expects to use its securities portfolio as a source of liquidity for higher-yielding loan opportunities as lending conditions improve. He said leveraged AAA collateralized loan obligation securities were producing returns in the 14% to 15% range, while more than $1 billion of mostly AAA mortgage-backed securities held without leverage yielded about 5.5%.
“We don’t view these unlevered securities as long-term investments, but rather as a source of liquidity for higher-yielding loan origination in the quarters ahead,” Harris said.
Credit and Legacy Exposure
Ladder had two nonaccrual loans with a combined carrying value of $61 million at quarter-end. One, with a carrying value of $51 million, is secured by a Los Angeles hotel. The other is secured by an office property in Minneapolis, which the company expects to take ownership of during the fourth quarter.
The company charged off $3.5 million of CECL allowance associated with the Minneapolis loan, reducing its carrying value to $9.9 million, or $67 per square foot. Its overall CECL reserve totaled $44 million, or $0.35 per share, representing 1.48% of the loan portfolio.
Harris said Ladder had identified its five largest office exposures in 2022 and has now resolved four of those assets without losses. He said the remaining office loan from that group is expected to pay off in full before year-end. McCormack later said Ladder’s legacy loan book totaled about $250 million, with an average loan size of roughly $25 million, and management expects more than $100 million of loans from the earlier vintage to be repaid before year-end.
Real Estate Strategy and Capital Allocation
Ladder’s $900 million real estate segment generated stable net operating income during the quarter, Miceli said. The portfolio includes 148 net-lease properties, primarily leased to investment-grade tenants, with an average remaining lease term of 6.4 years.
Harris said real estate gains should not be viewed simply as isolated events, noting that Ladder has generated $250 million of profits from the sales of 69 assets since becoming public 13 years ago. Over the past five years following the pandemic, the company reported $76 million of such gains.
Management said it remains open to selectively acquiring real estate, loans, securities and potentially companies or assets from distressed market participants. Harris said Ladder is particularly focused on higher-quality properties and markets, while emphasizing that it is not making a broad call on the office sector.
The company declared a quarterly dividend of $0.23 per share, paid Oct. 15. Management said its floating-rate asset base, fixed-rate debt structure, loan growth and liquidity position are expected to support the dividend and future earnings in a higher-for-longer interest-rate environment.
About Ladder Capital (NYSE:LADR)
Ladder Capital Corp. is a commercial real estate finance company organized as a real estate investment trust (REIT). The company focuses on originating, acquiring, investing in and managing a diversified portfolio of commercial real estate assets and investments. Its activities are primarily concentrated in the United States.
Ladder Capital's platform includes commercial mortgage loans, commercial mortgage-backed securities and other commercial real estate-related investments. The company also owns and manages commercial real estate properties, including assets that can generate rental income through net lease arrangements.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Ladder Capital, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Ladder Capital wasn't on the list.
While Ladder Capital currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
