Apollo Commercial Real Estate Finance Q4 Earnings Call Highlights

Core Insights - Apollo Commercial Real Estate Finance (ARI) is actively managing its real estate owned (REO) portfolio to enhance cash flow and maximize exit value while focusing on four retained assets [2][6][19] Group 1: Property Overview - The Brook is a newly built Class A multifamily tower with 591 residential units and approximately 20,000 square feet of retail space, currently 56% leased with strong leasing momentum of 20-40 units per month [1] - The retail component at The Brook is 88% leased to Din Tai Fung, with expected occupancy next year [1] Group 2: Financial Performance - For Q4 2025, ARI reported distributable earnings of $37 million, or $0.26 per diluted share, and full-year distributable earnings of $139 million, or $0.98 per diluted share [5][10] - The company ended 2025 with a total loan portfolio of approximately $8.8 billion, achieving a weighted average unlevered yield of 7.3% [16] Group 3: Liquidity and Financing - ARI concluded 2025 with $151 million in liquidity and over $430 million in unencumbered assets, alongside $1.8 billion in added financing capacity [4][17] - The company is contemplating a Q1 dividend near $0.25 per share, pending board approval [4][20] Group 4: Strategic Initiatives - Management is implementing cost-saving initiatives at The Mayflower hotel, expecting a notable increase in net cash flow once completed [7] - The Courtland Grand is undergoing value-add upgrades to enhance group business, with management evaluating restoration options following a fire incident [7] Group 5: Portfolio Management - ARI is managing four retained properties, including The Brook and The Mayflower, to stabilize operations and optimize monetization timing [6][19] - The Massachusetts pre-development portfolio involves zoning changes aimed at increasing site value [8]