Apollo Commercial Real Estate Finance, Inc.

Business description

• Apollo Commercial Real Estate Finance, Inc. (ARI) is a Maryland corporation that has elected to be taxed as a real estate investment trust (REIT).
• External management and advisory services are provided by ACREFI Management, LLC, an indirect subsidiary of Apollo Global Management, Inc.
• Core activity: originates, acquires, invests in, and manages performing commercial real estate debt investments, primarily commercial first mortgage loans, subordinate financings, and other commercial real estate–related debt investments.
• The company may foreclose on loans and operate assets as real estate owned (REO) when necessary.
• Reporting: single reporting segment. The company uses secured debt facilities, private securitizations, and other financing to fund its activities and manages a diversified loan portfolio and, in some cases, REO assets (for example, hotels and development properties).

Quick facts and key metrics (as of 12/31/2025)

• Loans and other lending assets (net): total loans, net 8,774,216
• Number of loans: 56
• Unfunded loan commitments: 1,037,765
• Revenue and income (GAAP, year ended 12/31/2025):
  • Net interest income: 166,692
  • Revenue from real estate owned (REO) operations: 104,897
  • Total net revenue: 271,589
  • Operating expenses: (157,961)
  • Other income, net: 7,872
  • Income from equity method investment: 15,413
  • Decrease in current expected credit loss allowance, net: (3,229)
  • Foreign currency translation gain (loss): 99,483
  • Gain (loss) on foreign currency forward contracts: (98,703)
  • Gain (loss) on interest rate hedging instruments: 23
  • Net realized loss on investments: (7,436)
  • Net income before taxes: 127,051
  • Income tax provision: (331)
  • Net income: 126,720
  • Preferred dividends: (12,272)
  • Net income available to common stockholders: 114,448
  • Earnings per share (basic and diluted) for common stock: 0.81
  • Common dividends declared per share: 1.00
• Balance sheet snapshot (selected):
  • Total assets: 9,900,967
  • Total liabilities: 8,044,877
  • Total stockholders’ equity: 1,856,090
  • Cash and cash equivalents: 139,825
  • Commercial mortgage loans, net: 8,712,018
  • Subordinate loans, net: 62,198
  • Real estate owned, held for investment, net: 842,947
  • Note receivable, held for sale: — (2025)
  • Derivative assets, net: — (2025)
• Capital structure (as of 12/31/2025):
  • Preferred stock — Series B-1: 6,770,393 shares outstanding
  • Common stock: 138,943,831 shares outstanding
  • Total stockholders’ equity: 1,856,090
• Dividends:
  • Common stock dividends per share: 1.00
  • Series B-1 preferred stock dividends per share: 1.81

Portfolio details (12/31/2025)

• Carrying values:
  • Commercial mortgage loans, net: 8,712,018
  • Subordinate loans, net: 62,198
  • Total loans, net: 8,774,216
  • Note receivable, held for sale: — (2025)
  • Carrying value, net: 8,774,216
  • General CECL Allowance: (38,754)
  • Total CECL Allowances (General plus Specific): (44,513)
• Portfolio statistics:
  • Principal balance: 9,204,060
  • Unfunded loan commitments: 1,037,765
  • Weighted-average cash coupon: 6.5%
  • Weighted-average remaining fully-extended term: 3.2 years
  • Weighted-average expected term: 2.2 years
• Composition by property type (carrying value):
  • Residential (including multifamily, senior housing): 2,315,975 (26.3%)
  • Office: 2,064,821 (23.4%)
  • Hotel: 1,770,331 (20.1%)
  • Industrial: 1,026,213 (11.6%)
  • Data centers: 560,699 (6.4%)
  • Retail: 323,327 (3.7%)
  • Mixed use: 302,544 (3.4%)
  • Other: 449,060 (5.1%)
  • Total: 8,812,970 (100.0%)
• Geography of collateral (carrying value):
  • United Kingdom: 2,603,388 (29.5%)
  • New York City: 1,616,025 (18.3%)
  • Other Europe: 1,178,074 (13.4%)
  • Southeast: 973,051 (11.0%)
  • West: 824,486 (9.4%)
  • Midwest: 754,115 (8.6%)
  • Other: 863,831 (9.8%)
  • Total: 8,812,970 (100.0%)
• Credit losses and CECL highlights:
  • General CECL Allowance (funded): 38,754
  • General CECL Allowance (unfunded): 5,759
  • Specific CECL Allowance activity in 2025 included additions on certain loans and reversals/write-downs; Specific CECL amounts (funded) are reflected within total CECL balances.

Debt and liquidity

• Secured debt arrangements, net: 6,268,550
• Major debt components:
  • 2030 Term Loan (Senior Secured Term Loan): carrying value 727,533; interest SOFR + 3.25%; maturity 6/13/2030
  • Senior Secured Notes (2029 Notes): carrying value 497,226
  • Revolving Credit Facility: undrawn as of 12/31/2025
  • Barclays private securitization (VIE) is a material component of secured borrowings (carrying value reported net of CECL allowances)
• Debt covenants include tangible net worth thresholds, indebtedness-to-assets limits, and liquidity thresholds; the company was in compliance with covenants as of 12/31/2025 and 12/31/2024.
• Maturity profile (secured debt arrangements, by year buckets):
  • Less than 1 year: 701,112
  • 1 to 3 years: 2,356,227
  • 3 to 5 years: 3,219,887
  • Total gross borrowings: 6,277,226 (before deferred financing costs)

Real estate owned (REO) — held for investment (12/31/2025)

• Properties:
  • D.C. Hotel — full-service luxury hotel, Washington, D.C.
  • Brooklyn Multifamily Development — Brooklyn, NY
  • Atlanta Hotel — Atlanta, GA
• REO carrying values:
  • D.C. Hotel: 137,380 (net of depreciation)
  • Brooklyn Multifamily Development: 630,966 (net)
  • Atlanta Hotel: 58,160 (net)
• REO operations (2025):
  • Hotel revenue: 102,359
  • Rental income: 2,538
  • REO operating expenses: (85,213)
  • REO depreciation: (11,173)
  • REO net income: 8,511

Substantive post-12/31/2025 events (selected)

• Investment activity after year-end:
  • Funded approximately 78,100 for previously closed loans
  • Loan repayments approximately 110,000, including full repayment of an $86,700 resort loan in St. Thomas, USVI
• Proposed transaction with Athene (announced 1/27/2026):
  • Asset sale of loans to Athene, subject to closing conditions, approvals, and a go-shop period
  • Purchase price: 99.7% of total commitment amount, cash at closing
  • Go-shop period through 2/21/2026; customary termination rights and termination fee structure
  • Related changes to management and the A&R Management Agreement are contemplated upon closing
  • Expense Reimbursement Letter Agreement with Apollo Management Holdings to reimburse up to $10 million of asset-sale-related expenses

Other notes of interest

• Real estate and impairment policies: REO is recorded at fair value upon acquisition (ASC 805) and subsequently carried at depreciated cost with impairment testing.
• Revenue recognition: interest income accrues on lending assets; nonaccrual rules apply; REO revenues are recognized on hotel and rental operations.
• Equity and incentives: equity incentive plans (2019 LTIP and 2024 LTIP) include RSUs and restricted stock; compensation cost has been recognized and unrecognized compensation expense remains for vesting.
• Fair value: derivatives and certain loan portfolios are measured in Level II/III of the fair-value hierarchy; see the consolidated notes for full disclosure.
• Segments: one reporting segment; the chief operating decision maker uses consolidated net income (loss) to evaluate performance.