Apollo Commercial Real Estate Finance, Inc. (ARI) provided an investor presentation detailing its loan portfolio and strategic focus on asset resolution as of December 31, 2024. The company's portfolio had a carrying value of $7.1 billion across 45 loans, with 95% in first mortgages and a weighted-average risk rating of 3.0.
The portfolio exhibited diversification across property types, including 25% in Office, 22% in Hotel, and 22% in Residential properties. Geographically, 34% of the portfolio was in the United Kingdom and 22% in New York City, with 26% of the total portfolio originated post-2022.
ARI is actively managing non-performing and Real Estate Owned (REO) assets to maximize value recovery. For the Ultra-Luxury Condo Building in New York, with an amortized cost of $390 million, the third-party senior mortgage is expected to be repaid by mid-2025, which will allow future sales proceeds to reduce ARI's loan balance.
The Retail Center in Ohio, with an amortized cost of $97 million and approximately 92% leased, is targeted for resolution prior to the end of 2025. The D.C. and Atlanta Hotels, with a combined book value of $153 million, are cash flow positive, and the D.C. Hotel is generating a levered return consistent with ARI's target.
The Brooklyn Multifamily Development, with a book value of $289 million, continues to progress, with initial Temporary Certificates of Occupancy (TCOs) expected in mid-2025. An exit for this asset is anticipated in 2026, at which point ARI expects to redeploy the capital into new originations. Management estimates an annual operating earnings uplift of approximately $0.40 to $0.60 per share from the reinvestment of equity tied to these non-performing loans and REO.
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