ACRE 2026년 3분기 실적 콘퍼런스콜: REO 매각, CECL 충당금 및 대출 정리

핵심 요약

• 아레스 커머셜 리얼 에스테이트 코퍼레이션(NYSE: ACRE)은 2026년 3분기 GAAP 기준 순이익이 약 1,000만 달러(희석 보통주당 0.18달러)를 기록했다고 발표했다. 배당가능이익은 670만 달러(희석주당 0.12달러)였다.
• 회사는 노스캐롤라이나주 샬럿의 오피스 REO 자산을 장부가액보다 약 700만 달러 높은 순매각대금에 매각했다. 오피스 대출 및 오피스 REO 투자 잔액은 4억 4,400만 달러로 전 분기 대비 10%, 전년 동기 대비 19% 감소했다.
• 총 CECL 충당금은 1억 4,100만 달러로 2분기 대비 약 200만 달러 증가했으며, 투자목적 보유 대출 원금 잔액의 약 8% 수준이었다. 위험 등급 4 및 5등급 대출이 충당금의 94%인 1억 3,300만 달러를 차지했다.
• 가용 자본은 총 1억 1,600만 달러였으며, CECL을 제외한 순부채비율은 1.9배였다. ACRE는 3분기 중 3,500만 달러, 연초 대비 1억 4,600만 달러의 상환금을 회수했다.
• 분기 종료 후 ACRE는 만기 채무불이행 상태였던 2,800만 달러 규모의 뉴어크 산업용 부동산 대출에 대해 원금, 미수 이자 및 연체 이자를 포함한 전액을 상환받았다. 경영진은 이 대출이 포트폴리오 내 유일한 부실 대출이었다고 밝혔다.
• 이사회는 2026년 4분기 배당금으로 보통주당 0.15달러를 결의했다. 경영진은 무수익 투자 자산을 해결하고 해당 자본을 수익 창출 자산에 재배치하는 것이 향후 배당가능이익 성장의 중요한 동력이 될 수 있다고 말했다.

주요 재무 데이터

사업 및 영업 실적

ACRE는 기존 오피스 자산에 대한 익스포저를 지속적으로 축소했다. 샬럿 REO 매각 이후 오피스 대출 및 오피스 REO 투자 잔액은 총 4억 4,400만 달러를 기록했다. 남아 있는 오피스 대출은 7건으로, 이 중 5건은 위험 등급 1~3등급이며 스폰서의 지원 속에 안정적이거나 개선되는 실적을 보이고 있는 것으로 나타났다.

회사의 대출 포트폴리오는 지난 12개월 동안 40% 이상 증가했다. 3분기 중 ACRE는 산업용 부동산 포트폴리오를 담보로 한 3,500만 달러 약정 규모의 선순위 공동투자 대출 1건을 실행했다. 이 중 2,800만 달러는 투자 목적으로 보유했고, 700만 달러는 매각 목적으로 취급해 분기 중 매각했다.

위험 등급 1~3등급 대출은 관련 CECL 충당금을 차감한 대출 포트폴리오 장부가액의 90%를 차지했다. 해당 대출은 모두 변동금리였으며, 94%는 평균 1개월물 SOFR 행사가격 4.3%의 금리 상한 계약이 체결되어 있었다. 변동금리 자산 위주인 ACRE의 자산은 전액 변동금리 차입금으로 조달됐다.

시카고 오피스 대출과 브루클린 주거용 콘도미니엄 대출이 위험 등급 4 및 5등급 대출 원금 잔액의 95%를 차지했다. ACRE는 매각과 해결 과정에 대한 통제력을 높이기 위해 시카고 자산의 소유권 취득 절차에 착수했다. 해당 자산은 임대율이 90%를 웃돌고, 가중평균 잔여 임대기간이 7년을 초과하며, 9월 30일 기준 CECL 차감 후 장부가액 대비 두 자릿수 부채수익률을 기록했다.

브루클린 콘도미니엄 프로젝트는 공사가 완료되어 추가 마케팅과 매수 수요 유치에 도움이 되고 있다. 개별 세대 매각 시기와 매각대금에 대한 가시성이 확보되면서 해당 대출의 위험 등급은 4등급에서 5등급으로 하향 조정됐다. 관련 손실은 개별 매각이 완료됨에 따라 비례하여 인식될 예정이다.

10월 최대 규모의 멀티패밀리 대출이 상환되면서 ACRE의 멀티패밀리 대출은 6건으로 집계됐다. 이 중 4건은 2025년 또는 2026년에 신규 취급됐다. 6,700만 달러 규모의 샌안토니오 대출은 스폰서가 원금 감축을 위해 추가 자본을 투입하면서 만기가 연장됐고, 5,700만 달러 규모의 신시내티 대출은 요구 실적 기준을 초과 달성해 계약상 만기 연장 요건을 충족했다.

경영진 전망

경영진의 최우선 과제는 잔여 REO 자산과 위험 등급 4 및 5등급 대출을 해결하는 동시에, 비용 효율적인 레버리지를 활용해 가용 자본을 선별적으로 집행하는 것이다. 무수익 대출을 포함한 이들 대상 자산은 관련 차입 조달 전, CECL 차감 후 장부가액 기준으로 약 1억 6,000만 달러 규모다.

회사는 수익이 거의 없거나 전무한 투자 자산에서 자본을 회수해 새로운 수익 창출 자산에 재배치하는 것이 수익 성장의 더욱 중요한 동력이 될 수 있다고 밝혔다. 경영진은 자산 해결 시점과 시장 상황에 따라 달라질 수 있으나, 포트폴리오 재편과 다변화가 EPS 성장과 배당금을 충당하거나 웃도는 이익 창출을 뒷받침할 것으로 기대하고 있다.

리스크 및 주시 사항

• 경영진은 상업용 부동산 시장이 비교적 우호적이라고 설명하면서도, 고금리가 전반적으로 양호한 부동산 펀더멘털에 역풍으로 작용하고 있다고 언급했다.
• 경영진은 최근 금리 움직임으로 인해 자산별 차이는 있으나 대부분의 부동산 유형에서 가치가 대략 2%~6% 하락한 것으로 추정했다.
• 시카고 오피스 대출은 여전히 위험 등급 5등급으로 유지되고 있으며, ACRE 전체 CECL 충당금의 절반가량을 차지한다. 회사는 해결 과정에 대한 통제력을 높이기 위해 소유권 확보를 추진하고 있다.
• 브루클린 콘도미니엄 손실은 개별 세대가 매각되는 과정에서 발생할 예정이어서 손실 인식 시점에 대한 불확실성이 상존한다.
• 위험 등급 4 및 5등급 대출은 CECL 충당금의 1억 3,300만 달러를 차지했으며, 이는 해당 대출 원금 잔액의 약 34%에 해당한다.
• 경영진은 여러 시장에서 펀더멘털 개선과 신규 공급 제약을 언급했으나, 고금리는 콘도미니엄 매수자 심리와 부동산 밸류에이션에 영향을 미칠 수 있다.

애널리스트 질의응답(Q&A) 주요 내용

경영진은 2,800만 달러 규모의 뉴어크 산업용 부동산 대출이 4등급이나 5등급으로 분류되지 않았다고 명확히 했다. ACRE가 해당 대출의 담보 가치가 충분하다고 판단해 위험 등급 3등급을 유지했으며, 실제로 원금, 미수 이자 및 연체 이자 전액을 회수했다.

시카고 오피스 자산과 관련해 경영진은 소유권 인수가 주로 구조를 단순화하고 매각 시점과 해결 과정에 대해 보다 직접적인 통제력을 제공할 것이라고 설명했다. 또한 해당 부동산은 임대율이 90%를 넘고 기관투자자급 우량 임차인이 입주해 있으며 잔여 임대기간이 약 7년이어서 대규모 자본적 지출(CAPEX) 주기는 예상되지 않는다고 밝혔다. 해당 자산은 3분기 중 170만 달러의 순영업현금흐름 지급액을 창출해 ACRE의 대출 원부를 차감했다.

브루클린 콘도미니엄 프로젝트와 관련해 경영진은 공사 완료로 현장 투어와 매각이 원활해질 것이라고 밝혔다. 손실은 일시 상각이 아니라 개별 세대 매각이 완료될 때마다 순차적으로 인식될 예정이다.

분기 종료 후 담보부 정기대출을 상환한 ACRE는 향후 투자 속도가 주로 대출 상환액, 전반적인 시장 상황 및 가용 투자 기회에 달려 있을 것이라고 밝혔다. 회사는 환매조건부채권(Repo) 및 기타 유연한 자금조달 수단을 포함해 자금조달 구조가 변동금리 선순위 대출 위주의 포트폴리오와 부합하도록 유지할 것으로 예상하고 있다.

배당 커버리지에 대한 질문에 경영진은 구체적인 일정을 제시하지 않았다. 다만 위험 등급 4 및 5등급 대출과 REO 자산을 해결하는 것이 배당가능이익 확대를 위한 핵심 과제라는 점을 거듭 강조했다.

실적 발표 콘퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning. Welcome to Ares Commercial Real Estate Corporation's Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Friday, November 6, 2026.

I will now turn the call over to Mr. John Stilmar, Partner of Public Markets Investor Relations.

John Stilmar

Thank you, and good morning. We appreciate you for joining us on today's conference call. Before we begin, I will remind everyone that comments made during the course of accompanying documents contain forward-looking statements and are subject to risks and uncertainties.

Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may and similar such expressions. These forward-looking statements are based on management's current expectations of market conditions and management's judgment. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. The company's actual results could differ materially from those expressed in its forward-looking statements as a result of a number of factors, including those listed in its SEC filings. Ares Commercial Real Estate assumes no obligation to update any such forward-looking statements.

During this call, we will refer to certain non-GAAP financial measures. We use these as measures of operating performance, and these measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. These measures may not be comparable to like titled measures used by other companies.

Now I'd like to turn the call over to our CEO, Bryan Donohoe. Bryan?

Bryan Donohoe

Thank you, John. I'm here today with Jeff Gonzales, our CFO, as well as other members of the management and Investor Relations teams. Overall, the commercial real estate market remains moderately constructive as the recent rise in interest rates runs counter to the generally positive underlying property fundamentals. We believe at times like these, it is valuable to be a part of the scaled Ares platform, which provides us with differentiated market insights and a deep pipeline of opportunities, allowing us to remain patient and highly selective as the market continues to adjust to these macro drivers.

During the third quarter and so far in the fourth quarter, we sold 1 of our 2 REO properties. We were fully repaid on our only loan in default, and we made progress on our risk-rated 4 and 5 loans. Leading off with the REO property. We completed the sale of the Charlotte, North Carolina office asset in the third quarter with net proceeds of approximately $7 million above our carrying value. When we acquired title in 2024, we believe that our ownership would allow us to enhance the value of the property, benefit from a relatively attractive cash flow yield and control the exit in a more constructive environment.

This successful exit underscores the merits of our view, the strength of our active management approach and the benefits of our balance sheet position. Supported by this outcome, our office loan and office REO investments totaled $444 million at the end of the third quarter, down 10% quarter-over-quarter and 19% year-over-year. There are 7 remaining office loans, of which 5 are risk rated 1 through 3 and continue to exhibit stable to improving performance with sponsor support to further advance their respective business plans.

Additionally, subsequent to quarter end, the $28 million Newark, New Jersey industrial loan that had been in maturity default was fully repaid, including all accrued default interest. Now let us discuss the advancements towards resolutions across 4 risk-rated 4 and 5 loans. As of 3Q 2026, the Chicago office loan and the Brooklyn Residential condo loan accounted for 95% of the outstanding principal balance of risk-rated 4 and 5 loans. Starting with the Chicago office loan. Our goal is to accelerate the resolution of this loan and have, therefore, recently begun the process of acquiring title to the property. We believe this action will provide us with greater control over the sales process while benefiting from the cash flow of the property.

Importantly, fundamentals at the property remained stable with occupancy above 90% and a weighted average lease term over 7 years. The property's operating cash flow relative to our carrying value net of CECL as of September 30, 2026, represents a double-digit debt yield. Taken together with the balance sheet flexibility we have maintained, we believe we have the ability to better determine the optimal outcome for this asset. Turning to the Brooklyn Residential Condo. It was completed supporting increased marketing and greater buyer interest. While we continue to monitor the potential impact of higher interest rates on buyer behavior, we remain encouraged by activity at the property as traffic has continued to pick up since Labor Day and early market signs remain positive.

As we have increased visibility of timing and proceeds from condominium sales based on the progression of the project, we have greater clarity into the probability of our financial results, which was one of the primary factors that drove the adjustment of the risk rating from a 4 to a 5. With respect to timing of recognizing losses, as a condominium project, proportional losses will be recognized as individual unit sales are closed. The remaining 2 risk-rated 4 and 5 loans totaled $20 million of carrying value at quarter end or $6 million net of related CECL reserves. Collectively, the 4 risk-rated 4 and 5 loans represent 10% of carrying value net of related CECL reserves. While we continue to make progress on our risk-rated 4 and 5 loans, we selectively added to the portfolio.

Supported by the depth and breadth of the Ares platform, we continue to see compelling opportunities to invest. However, as we have long communicated, the pace of portfolio growth reflects our management of liquidity, the pace of resolutions and our assessment of market conditions. To that end, during the third quarter, we closed one new senior co-investment loan on a portfolio of industrial properties with a $35 million commitment, of which $28 million is classified as held for investment and $7 million was classified as held for sale and thereafter sold.

Over the past 12 months, ACRE's portfolio has increased over 40%. We believe the Ares platform provides us with the scale, deep market insights and broad opportunity set to selectively invest in loans that we believe offer attractive risk-adjusted returns. By leveraging the Ares real estate debt platform, which has completed nearly $10 billion of new loan commitments globally over the past 12 months and co-investing alongside other Ares managed vehicles, ACRE is able to access what we believe are high-quality investment opportunities. This scale enables ACRE to drive greater portfolio diversification objectives while participating in larger institutional quality loans. Despite a backdrop of higher interest rates, we continue to see generally healthy fundamentals in our risk-rated 1 through 3 loans. These loans represent 90% of our loan portfolio carrying value net of related CECL.

Given the change in interest rates and the market's focus on multifamily assets, let me now provide a little bit more specificity on the positioning of our multifamily portfolio. Following the full repayment of our largest multifamily loan in October, we now have 6 multifamily loans. 4 of the loans were originated in 2025 or 2026 and continue to make progress on their business plan. The two pre-2025 vintage multifamily loans continue to benefit from strong sponsorship and structural protections. Subsequent to quarter end, the larger of these 2 loans, a $67 million multifamily loan in San Antonio, Texas was extended after the sponsor contributed new equity to reduce the principal amount of the loan. In addition, the loan benefits from the partial principal guarantee as well as interest and carry guarantees for the remainder of the loan term.

The other pre-2025 loan, a $57 million multifamily loan in Cincinnati, Ohio, qualified for a contractual extension given the property performance exceeded its required extension tests. We are encouraged by the performance of our risk-rated 1 through 3 loans, including both our multifamily and office portfolios. The stability of our risk rated 1 through 3 risk ratings and the level of our overall CECL reserve reinforce our view of the underlying health and quality of our portfolio.

In conclusion, we're proud of our progress this year while recognizing there is more work to do. Our focus remains clear. Number one, resolving our remaining REO asset and risk-rated 4 and 5 loans, including loans that are on nonaccrual, which in the aggregate total approximately $160 million of carrying value net of CECL, but gross of associated financing; and two, deploying our available capital in a disciplined manner to drive additional portfolio growth, utilizing cost-efficient leverage. As we execute on our business plan, we believe that the resolution of our nonaccruing investments represents a more significant potential driver of earnings growth as those resolutions can redeploy capital currently generating little or no income into new earning assets. Combined with the diversification and repositioning of our portfolio, we expect our actions to drive EPS growth and support earnings that meet or exceed our dividend while delivering long-term value for shareholders.

With that, I'll turn the call over to Jeff, who will walk through our third quarter financial results.

Jeffrey Gonzales

Thank you, Bryan. For the third quarter of 2026, we reported GAAP net income of approximately $10 million or $0.18 per diluted common share. Our distributable earnings for the third quarter of 2026 was approximately $6.7 million or $0.12 per diluted common share. This includes the impact from the net realized gain of $300,000 or $0.01 per diluted common share related to the sale of the North Carolina office REO property Bryan previously mentioned.

For distributable earnings purposes, the $7.1 million GAAP gain is adjusted to exclude the impact of accumulated depreciation and amortization as those charges were not previously recognized in distributable earnings since the acquisition of the REO property. Distributable earnings for the third quarter, excluding this realized net gain was approximately $6.4 million or $0.11 per diluted common share. Additionally, during the third quarter, we collected $1.7 million or $0.03 per diluted common share of cash interest on loans that were on nonaccrual and was accounted for as a reduction in our loan basis.

Turning to liquidity and leverage. We've made meaningful progress towards strengthening and diversifying our funding model with a focus on creating greater capacity, flexibility and efficiency as we reposition the portfolio. We continue to maintain moderate leverage, which supports further resolutions of underperforming loans and future growth. We ended the quarter with a net debt-to-equity ratio, excluding CECL of 1.9x. In the third quarter of 2026, we collected $35 million of repayments, bringing year-to-date total repayments to $146 million. Given the timing of repayments and resolutions during the quarter, we closed one new senior co-investment loan on a portfolio of industrial properties with a $35 million commitment, of which $28 million is classified as held for investment and $7 million was classified as held for sale at origination and sold during the quarter.

During the period between origination and the completion of the sale, we earned interest and fee income on the portion of the loan classified as held for sale. While the loan held for sale this quarter was small relative to the overall portfolio, we continue to believe the strategy of short-term originations provides an efficient way to deploy excess liquidity while preserving balance sheet flexibility for longer-term investment opportunities. As we continue to address our remaining risk-rated 4 and 5 loans, office loans and REO property, we remain focused on maintaining a flexible balance sheet.

As of September 30, 2026, available capital totaled $116 million, providing ample liquidity to support asset resolutions and selective deployment of capital into new investment opportunities. Our balance sheet also benefits from a well-matched asset and liability profile with predominantly floating rate assets and liabilities. To that end, subsequent to quarter end, we fully repaid the secured term loan and its term was not extended. The repayment of the term loan was supported by our flexible balance sheet position and reflects our broader strategy to optimize and align our financing structure with the evolving composition of the portfolio. As part of this strategy, we also consider the interest rate structure of our portfolio.

Importantly, we have intentionally structured both our assets and liabilities with features designed to mitigate interest rate risk. Currently, ACRE's predominantly floating rate portfolio is 100% financed with floating rate borrowings, providing a natural alignment between our assets and liabilities. At the individual loan level, we also seek to employ structural protections that mitigate the impact of changes in interest rates while our borrowers execute their respective business plans. Across our risk rated 1 to 3 loans, 100% are floating rate and 94% have interest rate caps with an average 1-month SOFR strike rate of 4.3%. Importantly, the expiration of these caps generally aligned with the maturity of the underlying loans. More broadly, we underwrite and stress test our loans for potential rate fluctuations and continuously monitor the portfolio.

Now turning to our CECL reserve. The total CECL reserve remained relatively stable for the second consecutive quarter at $141 million as of September 30, 2026, an increase of approximately $2 million from the CECL reserve as of June 30, 2026. This increase was largely attributed to certain asset level changes in our risk rated 4 and 5 loans as well as a relative decline in the macroeconomic forecast compared to the prior quarter. The total CECL reserve at the end of the third quarter of $141 million represents approximately 8% of the total outstanding principal balance of our loans held for investment. 94% of our total CECL reserve or $133 million relates to risk-rated 4 and 5 loans and nearly half of the total CECL reserve is attributed to the risk-rated 5 Chicago office loan.

Overall, the $133 million of reserves attributable to our risk-rated 4 and 5 loans represent approximately 34% of the outstanding principal balance of those risk-rated 4 and 5 loans. Our book value remained relatively stable at $8.86 per share. This continued stability reflects the progress we have made repositioning the portfolio and paired with stable CECL reserve is increasingly evident of the strength and health of the overall portfolio.

To conclude, the Board declared a regular cash dividend of $0.15 per common share for the fourth quarter of 2026. The fourth quarter dividend will be payable on January 15, 2027, to common stockholders of record as of December 31, 2026. At our current stock price on November 3, 2026, the annualized dividend yield on our third quarter dividend is approximately 18%.

With that, I will turn the call back over to Bryan for some closing remarks.

Bryan Donohoe

Thank you, Jeff. As we look ahead, we believe ACRE is increasingly well positioned to benefit from the progress we have made repositioning the portfolio. We have greater diversification, a growing mix of newer vintage loans and a flexible balance sheet while continuing to advance resolutions across our remaining risk-rated 4 and 5 loans. We believe executing against the strategy we outlined today can drive earnings growth over time while maintaining the discipline and flexibility that remains central to our strategy. As always, we appreciate you joining our call today, and we'd be happy to open the line for questions.

Operator

[Operator Instructions] We'll take our first question from Jade Rahmani with KBW.

질의응답

Jason Sabshon

This is Jason Sabshon on for Jade. Did you say that an industrial loan in default.

Bryan Donohoe

That's correct.

Jason Sabshon

Great. And was that in the risk 4 and 5 bucket? And what was the carrying value of that loan?

Bryan Donohoe

It was not in the risk rated 4 and 5 bucket. We felt we were very well collateralized. So therefore, I believe, Jeff, it was still 3. And we realized 100% of principal plus interest as well as default interest. So we felt the default is more of a technical nature and not indicative of distressed value.

Jeffrey Gonzales

And just to add, that was our only defaulted loan in the portfolio.

Jason Sabshon

Great. Yes. And also, I'd be curious if you're seeing incremental pressure anywhere in your existing portfolio due to higher rates. I know you commented on it a bit, but I guess also within that, in your multifamily book, what kind of debt yields are you seeing?

Bryan Donohoe

Yes. I think we've spoken when we -- if you were to go back whatever it was, 3 years ago now when you saw SOFR move up, I think, at 10x order of magnitude than it has over the last 6 months or so, there was certainly more stress. But we've always spoken about interest rates effectively being like gravity for values. So I think the impact of the rate movement over the past stretch here has probably moved values 2% to 6% for most product and some good variability.

The backdrop of that in many markets, though, is improving fundamentals. The inflation story is going to further limit supply. So you're seeing less of a move in cap rates in real time than you are necessarily in the rates themselves. So I think we'd all be remiss to think about rates not impacting valuations. But as you heard us describe in the prepared remarks, we feel like the earlier vintage transactions that withstood both of these rate movements would, in general, be more impacted.

But as we outlined on the 2 remaining multifamily deals from that vintage, we saw one perform in keeping with our original underwriting, qualifying as of right for its extension and the second, seeing a pretty significant structural support from sponsorship. So certainly, rates are impactful and directionally negative for real estate, but the stability of our risk-rated 1 to 3 book, I think, should be indicative of how we feel about that part of the portfolio.

Jason Sabshon

Great. And then lastly, on the risk 5 Chicago office loan, it would be helpful if you could provide an update. And if you were to take it REO, what kind of income yield would you see?

Bryan Donohoe

If we did take it back, I think it's just to simplify the structure to some degree. We've been collecting all free cash flow for some period of time and paying down debt as you're paying down our basis as you're aware. I think by stepping in, it may just simplify the structure, change the manner in which we benefit and allow us to have more direct control over the resolution and the resolution timing.

But the profile of the transaction has not changed. We outlined the lease term. This is not a CapEx-intensive asset. This has quality tenancy. So really not much of a change, except a change in the control and the path towards resolution.

Operator

We'll take our next question from Rick Shane with JPMorgan.

Hong Zhang

This is Hong on for Rick. I guess as it relates to the Brooklyn Condo loan, you talked -- could you provide some color on how you expect the pace of unit sales going forward? And do you expect -- just given the fact that you recognized losses, is this something where we should just expect, I guess, a short drip of losses quarter until the sale complete?

Bryan Donohoe

I think I heard most of the question. In terms of the Brooklyn Condominium, as we mentioned, construction complete, which usually has a positive impact on pace of tours and sales. And while the risk rating has changed, I don't think the progress towards ultimate resolution of the asset itself has. We typically -- there is some seasonality around sales within the New York market. It feels like it's a pretty active marketplace today. And in terms of your question from realization of losses, those will occur as individual unit sales are consummated. The typical path would be marketing and contracts and then ultimately sales once the condo is fully effective. So this business plan is progressing in keeping with a typical condominium regime in the New York market.

Hong Zhang

Got it. And then I guess with the Chicago property, as you acquire the title, should we expect just incremental operating expenses, CapEx or anything going on in the income statement or the balance sheet?

Bryan Donohoe

No. I mean we do not expect any significant CapEx cycle. This is a relatively well occupied, north of 90% occupied asset, institutional-grade asset with a lease term of approximately 7 years. So not a CapEx-intensive asset or cash flow profile.

Jeffrey Gonzales

As I mentioned in my prepared remarks, we collected $1.7 million of payments this quarter from net operating cash flow. So it's about $0.03 per share. So it gives you an idea of the kind of cash flow the property is generating.

Operator

[Operator Instructions] We'll move next to Chris Muller with Citizens Capital.

Unknown Analyst

This is Allison in for Chris. I appreciate taking question this morning. So with the term loan repaid subsequent to quarter end, do you think you'll start looking to shift more to offense? Or will you stay cautious in this environment?

Bryan Donohoe

I don't know that the term loan really will relate too much to our disposition as to aggressive or passive or the manner in which we repaid the term loan should be indicative of the balance sheet positioning that we've undertaken for the past 2-plus years to maintain flexibility. And I think that flexibility, as you mentioned, really allowed us to be proactive as it relates to underlying asset resolutions like the North Carolina office, but also, as I said, the manner in which we repay the loan.

Our view of the market, as we stated in the prepared remarks, is this is a period of digestion given the movement in rates. And our repayments will largely be indicative of how we position for the next round of originations, if you will. So the term loan stands on its own in terms of the flexibility we've afforded ourselves. In terms of growth and positioning of the platform, that will be dictated by more broad market conditions and the opportunity sets that we continue to find.

Jeffrey Gonzales

And Bryan, I'll just add on top of that with regard to the term loan. Our financing strategy does continue to evolve along with the composition of our portfolio. So as we're moving forward, we expect to be predominantly floating rate senior loan portfolio. So we saw an opportunity to better align our liability structure with our floating rate assets and utilize structures that are more efficient in the current market.

So that includes more like repo financing and other financing alternatives that we continue to consider that just provide us more flexibility with regard to those floating rate assets.

Unknown Analyst

Got it. That makes a lot of sense. And then just one more for me. Any thoughts on time line for dividend coverage? Any color on that would be super helpful.

Bryan Donohoe

Yes. I think you can read through where we were in prior quarters and today in terms of our focus on the risk-rated 4 and 5 loans and the REO assets in terms of that will be catalytic towards the growth of DE. There is a lot of potential energy, if you will, in terms of the assets on nonaccrual and the like. So I think the sequence has not changed from prior quarters, and our focus remains the same.

Operator

And it does appear that there are no further questions at this time. I would now like to hand it back to Bryan for any additional or closing remarks.

Bryan Donohoe

Great. I just want to thank everyone for their time today and for the team for the work this quarter. We appreciate your continued support of ACRE, and we look forward to speaking with you all on our next earnings call. Thank you.

Operator

Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of this conference call will be available approximately 1 hour after the end of this call through December 6, 2026, to domestic callers by dialing 1 (800) 753-6121 and to international callers by dialing 1 (402) 220-2676. An archived replay will also be available on the home page of the Investor Resources section of our website. This does conclude [ today's conference call. ]