Apollo Comml Real Est (NYSE:ARI) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://edge.media-server.com/mmc/p/yw7ihdnf/
Summary
Apollo Comml Real Est completed the sale of its $9 billion loan portfolio to Athene, resulting in $1.3 billion in cash and four REO assets valued at approximately $900 million.
The company is evaluating new commercial real estate strategies to enhance stockholder returns and expects to update on this in the coming months.
First quarter 2026 net income was $23 million or $0.16 per diluted share, with distributable earnings of $31 million or $0.22 per diluted share.
The company’s net interest income decreased slightly year-over-year, with interest expense rising due to higher secured debt balances.
Apollo Comml Real Est repurchased 6.8 million shares year-to-date, contributing to a $0.07 increase in book value per share.
The Board has authorized a new $150 million share repurchase program, with book value per share at $12.01 as of March 31, 2026.
The company anticipates paying a quarterly dividend with an 8% annualized yield on book value per share, subject to Board approval.
Apollo Comml Real Est is considering various asset classes for strategic investment but is cautious about market conditions and interest rates.
Full Transcript
OPERATOR
I’d like to remind everyone that today’s call and webcast are being recorded. Please note that they are the property of Apollo Comml Real Est And that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I’d also like to call your attention to the customary safe harbor disclosure in our press release regarding forward looking statements. Today’s conference call and webcast may include forward looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these statements and projections. In addition, we will be discussing certain non GAAP measures on this call which management believes are relevant to assessing the company’s financial performance. These measures are reconciled to the GAAP figures in our earnings presentation, which is available in the Stockholders section of our website. We do not undertake any obligation to update our forward looking statements or projections unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.apollocref.com or call us at 212-515-3200. At this time I’d like to turn the call over to the Company’s Chief Executive Officer, Stuart Rothstein.
Stuart Rothstein (Chief Executive Officer)
Thank you Operator Good morning and thank you for joining us on the Apollo Commercial Real Estate Finance Inc. First quarter 2026 earnings call. I am joined today by Anastasia Maronova, our Chief Financial Officer, and Scott Wiener, Chief Investment Officer. This call comes at a pivotal moment for ARI. As previously announced, we completed the sale of the company’s $9 billion loan portfolio to Athene on April 24 following repayment of ARI’s financing facilities, other indebtedness and transaction expenses. ARI’s total assets now consist of approximately $1.3 billion of cash along with four REO assets representing approximately $900 million in gross value. The sale delivered ARI stockholders a compelling premium to where the stock has traded in recent years and we believe this outcome demonstrates our unwavering commitment to maximizing stockholder value. As previously indicated, ARI’s management team, Board of Directors and other senior investment professionals at Apollo are in process of evaluating a range of commercial real estate related strategies for ARI, with the goal to deliver attractive go forward returns for stockholders. We have spent a significant amount of time since the announcement at the end of January exploring different strategies and speaking with bankers and other industry experts. We anticipate having an update on the strategy exploration in the coming months. Shifting now to a brief update on the four remaining REO assets As a reminder, two assets, the Brooklyn, a multifamily asset in Brooklynlyn and the Mayflower hotel in Washington D.C. represent approximately 80% of the REO net equity value at the Brooklyn. The market rate residential component is approximately 80% leased and affordable units are approximately 70% leased with 95% of units selected. Both components are expected to reach stabilization by this summer. We continue to monitor the market and think through the appropriate exit strategy either pre or post stabilization while continuing efforts to add value to the western parcel. With respect to the two hotels, the Mayflower had a strong first quarter with net cash flow well ahead of budget. Driven by margin improvements and higher occupancy, we see opportunity for continued improvement in year over year performance and subject to market conditions, we expect more clarity on exit strategy in the second half of the year. Turning to the Cortland Grand first quarter performance was below budget due to broader market softness. Though we expect business interruption insurance from the offline units and the benefit from the upcoming Soccer World cup over the summer to bring full year performance in line with our expectations. We are in active dialogue with several potential buyers regarding alternative uses as we think through potential exit strategies. Lastly, for the two remaining former hospital assets which combined represent approximately $24 …
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