Summary of ARI Q3 2025 Earnings Call

1Key Financial Results and Metrics

GAAP Net Income: $48 million, or $0.34 per diluted share.

Distributable Earnings: $42 million, or $0.30 per share; run rate distributable earnings (excluding realized losses and gains) were $32 million, or $0.23 per share, slightly below the dividend level.

Book Value per Share: Increased to $12.73, reflecting a $0.14 increase due to various financial adjustments.

Loan Portfolio: Totaled $8.3 billion with a weighted average unlevered yield of 7.7%.

Repayments: $1.3 billion during the quarter, totaling $2.1 billion year-to-date.

2Strategic Updates and Business Highlights

Loan Originations: Committed to $1 billion in new loans this quarter, bringing year-to-date originations to $3 billion. The company has a robust pipeline of transactions, with over $19 billion in commercial real estate loan originations across Apollo.

Focus on European Market: ARI is leveraging its position as a leading alternative lender in Europe, benefiting from a fragmented lending environment.

Asset Sales: Continued momentum in asset sales, particularly at 111 West 57th Street, with six new contracts signed, generating approximately $55 million in proceeds.

Liquidity Position: Strong liquidity of $312 million, with diversified sources of capital, including an upsized revolving credit facility.

3Forward Guidance and Outlook

Earnings Growth: Expectation of capital rotation from focus assets to positively impact earnings in Q4 and into 2026.

Portfolio Growth: Future growth is anticipated as capital from repayments and asset sales is redeployed into new loans.

Market Conditions: Improved clarity in the capital markets is expected to sustain a healthy pace of repayments, though variability quarter-to-quarter is acknowledged.

4Challenges and Points of Concern

Timing of Transactions: The timing of new loan transactions and repayments can be unpredictable, impacting earnings consistency.

Office Market Variability: While trends are improving, the office sector remains city-specific, with mixed performance across different markets.

Liberty Center Asset: The ongoing bankruptcy process of the parent company of the movie theater at Liberty Center may delay asset monetization.

5Notable Q&A Insights

111 West 57th Street: Expected to complete sales of remaining units in early 2026, with strong market interest.

Brook Multifamily Development: Anticipated to be brought to market in late spring or early summer 2026, depending on leasing momentum.

Repayment Trends: Elevated repayment rates are attributed to improved operating performance and open capital markets, with expectations for continued repayments.

Hospitality Sector: The company remains active in hotel financing, citing attractive opportunities rather than a specific sector trend. Overall, ARI's Q3 2025 performance reflects strong origination activity and a healthy pipeline, although challenges remain in timing and market variability. The company is optimistic about future earnings growth driven by capital redeployment from focus assets.