Cuộc họp công bố kết quả kinh doanh quý 3/2026 của ACRE: Bán tài sản REO, dự phòng CECL và xử lý các khoản vay

Những điểm nhấn chính

• Ares Commercial Real Estate Corporation (NYSE: ACRE) công bố lợi nhuận ròng GAAP quý 3/2026 đạt khoảng 10 triệu USD, tương đương 0,18 USD trên mỗi cổ phiếu phổ thông pha loãng. Lợi nhuận có thể phân phối đạt 6,7 triệu USD, tương đương 0,12 USD trên mỗi cổ phiếu pha loãng.
• Công ty đã bán tài sản REO văn phòng tại Charlotte, bang North Carolina với số tiền thu ròng cao hơn giá trị ghi sổ khoảng 7 triệu USD. Các khoản vay văn phòng và khoản đầu tư REO văn phòng đã giảm xuống còn 444 triệu USD, giảm 10% so với quý trước và giảm 19% so với cùng kỳ năm trước.
• Tổng mức dự phòng CECL là 141 triệu USD, tăng khoảng 2 triệu USD so với quý 2 và tương đương khoảng 8% dư nợ gốc của các khoản vay nắm giữ để đầu tư. Các khoản vay xếp hạng rủi ro 4 và 5 chiếm 133 triệu USD, tương đương 94% quỹ dự phòng.
• Tổng nguồn vốn khả dụng đạt 116 triệu USD, trong khi tỷ lệ nợ ròng trên vốn chủ sở hữu không bao gồm CECL là 1,9 lần. ACRE đã thu hồi 35 triệu USD tiền trả nợ trong quý và 146 triệu USD từ đầu năm đến nay.
• Sau khi kết thúc quý, ACRE đã nhận được khoản thanh toán toàn bộ cho khoản vay bất động sản công nghiệp trị giá 28 triệu USD tại Newark từng vỡ nợ khi đáo hạn, bao gồm nợ gốc, lãi cộng dồn và lãi phạt quá hạn. Ban lãnh đạo cho biết đây từng là khoản vay vỡ nợ duy nhất trong danh mục đầu tư.
• Hội đồng quản trị đã công bố mức cổ tức quý 4/2026 là 0,15 USD cho mỗi cổ phiếu phổ thông. Ban lãnh đạo cho biết việc xử lý các khoản đầu tư ngừng dự thu lãi và tái phân bổ nguồn vốn này vào các tài sản sinh lời có thể là động lực quan trọng thúc đẩy tăng trưởng lợi nhuận có thể phân phối trong tương lai.

Dữ liệu tài chính chủ chốt

Hoạt động kinh doanh và vận hành

ACRE tiếp tục giảm tỷ trọng nắm giữ đối với các tài sản văn phòng hiện hữu. Sau thương vụ bán tài sản REO tại Charlotte, tổng các khoản vay văn phòng và khoản đầu tư REO văn phòng còn 444 triệu USD. Hiện còn lại 7 khoản vay văn phòng, trong đó có 5 khoản được xếp hạng từ 1 đến 3 và được đánh giá là duy trì hiệu quả ổn định đến cải thiện nhờ sự hỗ trợ từ bên tài trợ.

Danh mục cho vay của công ty đã tăng hơn 40% trong 12 tháng qua. Trong quý 3, ACRE đã giải ngân một khoản vay đồng đầu tư cấp cao được bảo đảm bằng một danh mục bất động sản công nghiệp, với cam kết trị giá 35 triệu USD. Trong số đó, 28 triệu USD được giữ lại để đầu tư và 7 triệu USD được giải ngân để bán và đã bán thành công trong quý.

Các khoản vay xếp hạng rủi ro từ 1 đến 3 chiếm 90% giá trị ghi sổ của danh mục cho vay sau khi trừ dự phòng CECL liên quan. Tất cả đều có lãi suất thả nổi, và 94% có trần lãi suất với mức lãi suất thực hiện SOFR 1 tháng trung bình là 4,3%. Phần lớn tài sản có lãi suất thả nổi của ACRE được tài trợ hoàn toàn bằng các khoản vay có lãi suất thả nổi.

Khoản vay văn phòng tại Chicago và khoản vay căn hộ chung cư tại Brooklyn chiếm 95% tổng dư nợ gốc của các khoản vay xếp hạng rủi ro 4 và 5. ACRE đã bắt đầu quy trình tiếp quản quyền sở hữu đối với bất động sản tại Chicago nhằm nắm quyền kiểm soát tốt hơn đối với việc bán và xử lý tài sản này. Bất động sản này có tỷ lệ lấp đầy hơn 90%, thời hạn thuê bình quân gia quyền trên 7 năm và tạo ra tỷ suất lợi nhuận trên nợ ở mức hai chữ số so với giá trị ghi sổ ròng sau trừ CECL tính đến ngày 30 tháng 9.

Dự án chung cư tại Brooklyn đã hoàn tất xây dựng, hỗ trợ tích cực cho các hoạt động tiếp thị và thu hút sự quan tâm của người mua. Xếp hạng rủi ro của khoản vay đã bị hạ từ mức 4 xuống mức 5 khi ACRE nắm rõ hơn về thời gian và số tiền thu được từ việc bán các căn hộ. Các khoản lỗ liên quan sẽ được ghi nhận tương ứng theo tỷ lệ khi từng đợt bán căn hộ hoàn tất.

Sau khi thu hồi khoản vay bất động sản nhà ở nhiều gia đình lớn nhất vào tháng 10, ACRE hiện còn 6 khoản vay thuộc phân khúc này. Bốn khoản trong số đó được giải ngân vào năm 2025 hoặc 2026. Khoản vay trị giá 67 triệu USD tại San Antonio đã được gia hạn sau khi bên tài trợ góp thêm vốn chủ sở hữu để giảm nợ gốc, trong khi khoản vay 57 triệu USD tại Cincinnati đủ điều kiện gia hạn theo hợp đồng sau khi vượt qua các bài kiểm tra hiệu quả hoạt động theo yêu cầu.

Triển vọng từ ban lãnh đạo

Ưu tiên của ban lãnh đạo là xử lý tài sản REO còn lại cùng các khoản vay xếp hạng rủi ro 4 và 5, đồng thời giải ngân nguồn vốn khả dụng một cách có chọn lọc với đòn bẩy tiết kiệm chi phí. Các tài sản mục tiêu này, bao gồm cả các khoản vay ngừng dự thu lãi, chiếm khoảng 160 triệu USD giá trị ghi sổ sau trừ dự phòng CECL nhưng trước các khoản tài trợ vốn liên quan.

Công ty cho biết việc tái phân bổ vốn từ các khoản đầu tư sinh lời ít hoặc không sinh lời sang các tài sản sinh lời mới có thể là động lực quan trọng hơn thúc đẩy tăng trưởng lợi nhuận. Ban lãnh đạo kỳ vọng việc tái định vị và đa dạng hóa danh mục đầu tư sẽ hỗ trợ tăng trưởng EPS cũng như lợi nhuận đủ để đáp ứng hoặc vượt mức cổ tức, dù thời điểm cụ thể phụ thuộc vào tiến độ xử lý tài sản và điều kiện thị trường.

Rủi ro và các yếu tố cần theo dõi

• Ban lãnh đạo đánh giá thị trường bất động sản thương mại ở mức tích cực vừa phải, nhưng cho biết mặt bằng lãi suất cao hơn đang tạo ra lực cản đối với các yếu tố cơ bản vốn nhìn chung đang khả quan của thị trường bất động sản.
• Ban lãnh đạo ước tính rằng các biến động lãi suất gần đây đã làm giảm giá trị khoảng 2% đến 6% đối với hầu hết các loại hình bất động sản, với sự khác biệt tùy từng tài sản cụ thể.
• Khoản vay văn phòng tại Chicago vẫn giữ xếp hạng rủi ro mức 5 và chiếm gần một nửa tổng mức dự phòng CECL của ACRE. Công ty đang hoàn tất thủ tục xác lập quyền sở hữu nhằm tăng cường khả năng kiểm soát đối với quá trình xử lý tài sản.
• Các khoản lỗ từ dự án căn hộ tại Brooklyn sẽ phát sinh khi từng căn hộ được bán, tạo ra sự không chắc chắn về thời điểm ghi nhận lỗ.
• Các khoản vay xếp hạng rủi ro 4 và 5 chiếm 133 triệu USD dự phòng CECL, tương đương khoảng 34% tổng dư nợ gốc của các khoản vay này.
• Lãi suất cao hơn có thể tác động đến hành vi của người mua căn hộ và định giá bất động sản, ngay cả khi ban lãnh đạo chỉ ra rằng các yếu tố nền tảng đang cải thiện và nguồn cung mới bị thắt chặt tại nhiều thị trường.

Những điểm nhấn trong phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo làm rõ rằng khoản vay bất động sản công nghiệp trị giá 28 triệu USD tại Newark không bị xếp hạng 4 hay 5. Khoản vay này vẫn duy trì xếp hạng rủi ro mức 3 do ACRE đánh giá tài sản bảo đảm của khoản vay có giá trị tốt, và công ty đã thu hồi được toàn bộ nợ gốc, lãi cộng dồn cùng lãi phạt quá hạn.

Đối với tài sản văn phòng tại Chicago, ban lãnh đạo cho biết việc tiếp quản quyền sở hữu chủ yếu nhằm đơn giản hóa cấu trúc và đem lại quyền kiểm soát trực tiếp hơn đối với tiến độ và phương án xử lý. Công ty không dự kiến sẽ có một chu kỳ chi phí vốn lớn do bất động sản này có tỷ lệ lấp đầy hơn 90%, sở hữu khách thuê chất lượng cấp tổ chức và thời hạn thuê còn lại khoảng 7 năm. Bất động sản này đã tạo ra 1,7 triệu USD dòng tiền thuần từ hoạt động kinh doanh trong quý 3, giúp giảm trừ cơ sở giá trị khoản vay của ACRE.

Về dự án chung cư tại Brooklyn, ban lãnh đạo cho biết việc hoàn thành xây dựng sẽ hỗ trợ hoạt động tham quan thực tế và bán hàng. Các khoản lỗ sẽ được ghi nhận dần khi từng căn hộ hoàn tất giao dịch bán thay vì ghi nhận một lần duy nhất.

Sau khi tất toán khoản vay có bảo đảm sau thời điểm kết thúc quý, ACRE cho biết tốc độ đầu tư của công ty vẫn sẽ phụ thuộc chủ yếu vào các khoản thu hồi nợ, điều kiện thị trường chung và các cơ hội sẵn có. Công ty kỳ vọng cơ cấu nguồn vốn tài trợ sẽ tiếp tục duy trì sự tương thích với danh mục cho vay cấp cao chủ yếu có lãi suất thả nổi, bao gồm các hợp đồng mua lại (repo) và những giải pháp tài trợ vốn linh hoạt khác.

Khi được hỏi về mức độ bao phủ cổ tức, ban lãnh đạo không đưa ra mốc thời gian cụ thể. Họ tái khẳng định rằng việc xử lý các khoản vay xếp hạng rủi ro 4 và 5 cùng các tài sản REO là trọng tâm để gia tăng lợi nhuận có thể phân phối.

Toàn văn biên bản cuộc gọi báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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. ]