# Apollo Commercial Real Estate Finance, Inc. (ARI)

Informational only - not investment advice.

CIK: 0001467760
SIC: 6798 Real Estate Investment Trusts
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Holding And Other Investment Offices](/major-group/67/) > [SIC 6798 Real Estate Investment Trusts](/industry/6798/)
Latest 10-K filed: 2026-02-10
SEC page: https://www.sec.gov/edgar/browse/?CIK=1467760
Filing source: https://www.sec.gov/Archives/edgar/data/1467760/000119312526044725/ari-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-10 · accession 0001193125-26-044725 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001467760.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 271,589,000 USD | 2025 | verified |
| Net income | 126,720,000 USD | 2025 | verified |
| Assets | 9,900,967,000 USD | 2025 | verified |
| Net margin | 46.66% | 2025 | computed |
| Revenue YoY | -10.56% | 2025 | computed |
| ROE | 6.83% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | ARI | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 46.7% | 16.8% | 89 | 149 |
| Revenue growth | -10.6% | 3.7% | 11 | 149 |
| ROE | 6.8% | 5.7% | 57 | 151 |
| ROA | 1.3% | 1.5% | 40 | 155 |
| Liabilities / equity | 4.33 | 1.48 | 79 | 151 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6798 Real Estate Investment Trusts, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 271589000 | USD | 2025 | 2026-02-10 |
| Net income | 126720000 | USD | 2025 | 2026-02-10 |
| Assets | 9900967000 | USD | 2025 | 2026-02-10 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001467760.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  | 334,482,000 | 278,678,000 | 284,510,000 | 303,640,000 | 344,591,000 | 303,671,000 | 271,589,000 |
| Net income | 157,876,000 | 193,031,000 | 219,986,000 | 230,174,000 | 18,377,000 | 223,515,000 | 265,232,000 | 58,127,000 | -119,636,000 | 126,720,000 |
| Diluted EPS | 1.74 | 1.54 | 1.48 | 1.40 | 0.01 | 1.46 | 1.68 | 0.29 | -0.97 | 0.81 |
| Operating cash flow | 123,886,000 | 154,873,000 | 265,964,000 | 273,435,000 | 164,052,000 | 199,383,000 | 267,705,000 | 273,862,000 | 200,257,000 | 142,521,000 |
| Dividends paid | 132,213,000 | 183,877,000 | 227,217,000 | 269,232,000 | 237,751,000 | 199,646,000 | 200,574,000 | 202,019,000 | 185,949,000 | 141,276,000 |
| Share buybacks | 0.00 | 0.00 | 0.00 | 0.00 | 127,994,000 | 0.00 | 0.00 | 0.00 | 40,810,000 | 0.00 |
| Assets | 3,482,977,000 | 4,088,605,000 | 5,095,819,000 | 6,888,363,000 | 6,940,020,000 | 8,416,695,000 | 9,568,352,000 | 9,296,730,000 | 8,411,591,000 | 9,900,967,000 |
| Liabilities | 1,550,750,000 | 2,000,462,000 | 2,586,072,000 | 4,258,388,000 | 4,669,491,000 | 6,122,069,000 | 7,213,848,000 | 7,087,997,000 | 6,537,110,000 | 8,044,877,000 |
| Stockholders' equity | 1,932,227,000 | 2,088,143,000 | 2,509,747,000 | 2,629,975,000 | 2,270,529,000 | 2,294,626,000 | 2,354,504,000 | 2,208,733,000 | 1,874,481,000 | 1,856,090,000 |
| Cash and cash equivalents | 200,996,000 | 77,671,000 | 109,806,000 | 452,282,000 | 325,498,000 | 343,106,000 | 222,030,000 | 225,438,000 | 317,396,000 | 139,825,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  | 68.82% | 6.59% | 78.56% | 87.35% | 16.87% | -39.40% | 46.66% |
| Return on equity | 8.17% | 9.24% | 8.77% | 8.75% | 0.81% | 9.74% | 11.26% | 2.63% | -6.38% | 6.83% |
| Return on assets | 4.53% | 4.72% | 4.32% | 3.34% | 0.26% | 2.66% | 2.77% | 0.63% | -1.42% | 1.28% |
| Liabilities / equity | 0.80 | 0.96 | 1.03 | 1.62 | 2.06 | 2.67 | 3.06 | 3.21 | 3.49 | 4.33 |

## As-reported value updates

1 tracked difference above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/ARI/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001467760.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 1.13 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.32 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | -0.62 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 81,157,000 | 43,003,000 | 0.30 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 84,153,000 | 43,472,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 80,535,000 | -107,592,000 | -0.76 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 81,108,000 | 32,717,000 | 0.23 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 71,573,000 | -94,617,000 | -0.69 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 70,455,000 | 37,584,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 65,816,000 | 22,923,000 | 0.16 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 70,902,000 | 17,671,000 | 0.12 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 61,619,000 | 47,723,000 | 0.34 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 73,252,000 | 26,131,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 58,634,000 | 23,159,000 | 0.16 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 44,383,000 | 22,711,000 | 0.11 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from ARI's latest 10-K: [/company/ARI/business/](/company/ARI/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from ARI's latest 10-K: [/company/ARI/risk-factors/](/company/ARI/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1467760/000119312526342628/ari-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-10
Report date: 2026-06-30

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING INFORMATION

We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in our industry, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; the impact of a shutdown of the U.S. federal government; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the timing and amount of expected future fundings of unfunded commitments; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended (the "1940 Act"); the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities; the availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; our present and potential future competition; unexpected costs or unexpected liabilities, including those related to litigation; and risks associated with the exact amount or timing of our sales of assets and liquidating distributions; unexpected costs or unexpected liabilities that may arise from the transactions contemplated by the Plan and with our ability to realize the results of the Plan.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See Item 1A. "Risk Factors" and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our most recent Annual Report on Form 10-K and "Risk Factors" in the Special Meeting Proxy. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $1.05 trillion as of June 30, 2026.

34

The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo's global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

As previously disclosed, following the Asset Sale, our management team, in consultation with our board of directors, evaluated a range of commercial real estate–related strategies designed to reposition ARI. In assessing potential new asset strategies, we leveraged Apollo's broader investment platform and origination capabilities. We also considered strategic M&A opportunities and explored available strategic alternatives, including dissolution. On June 15, 2026, we announced that, following an extensive review of potential strategic alternatives for ARI, our board of directors determined that our dissolution, the liquidation of our assets and the winding up of our business and affairs are advisable and in our best interests and the best interests of the ARI stockholders.

On July 14, 2026, we filed the Special Meeting Proxy with the SEC related to the Special Meeting, for the following purposes: (i) to consider and vote on the Dissolution Proposal; (ii) to consider and vote on the Executive Compensation Proposal; and (iii) to consider and vote on the Adjournment Proposal. If the Plan is approved by our Stockholders, we will adopt the liquidation basis of accounting which requires our assets to be recognized at the estimated amounts expected to be collected and liabilities to be recognized at the estimated amounts at which they are expected to be settled.

The Asset Sale

On the Closing Date, pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company sold its commercial real estate loan portfolio (other than loans that were repaid prior to closing and the Chicago Hotel Loan which was repaid after the Closing Date) to Athene for cash consideration of approximately $8.6 billion, which is based on 99.7% of the total commitment amount of such loans as of the Closing Date, subject to certain adjustments as provided in the Purchase Agreement. A portion of the proceeds from the Asset Sale were used to repay all secured credit facilities and other indebtedness and to pay transaction expenses.

Current Market Conditions

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K.

35

Results of Operations

Net Income Available to Common Stockholders

For the three months ended June 30, 2026 and 2025, our net income available to common stockholders was $22.7 million, or $0.11 per diluted share of common stock, and $17.7 million, or $0.12 per diluted share of common stock, respectively.

For the six months ended June 30, 2026 and 2025, our net income available to common stockholders was $45.9 million, or $0.27 per diluted share of common stock, and $40.6 million, or $0.28 per diluted share of common stock, respectively.

Operating Results

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics compared to the most recently reported period ($ in thousands):

[[GREPCENT_TABLE]]
[["","","Three Months Ended"],["","","June 30, 2026","","","March 31, 2026","","","Change"],["Net interest income:"],["Interest income from commercial mortgage loans","","$","41,726","","","$","149,989","","","$","(108,263",")"],["Interest income from subordinate loans and other lending assets","","","\u2014","","","","\u2014","","","","\u2014"],["Interest expense","","","(33,585",")","","","(113,922",")","","","80,337"],["Net interest income","","","8,141","","","","36,067","","","","(27,926",")"],["Operations related to real estate owned:"],["Revenue from real estate owned operations","","","36,242","","","","22,567","","","","13,675"],["Operating expenses related to real estate owned","","","(23,081",")","","","(18,218",")","","","(4,863",")"],["Depreciation and amortization on real estate owned","","","(4,631",")","","","(3,981",")","","","(650",")"],["Net income related to real estate owned","","","8,530","","","","368","","","","8,162"],["Operating expenses:"],["General and administrative expenses","","","(5,810",")","","","(5,952",")","","","142"],["Management fees to related party","","","(3,556",")","","","(8,118",")","","","4,562"],["Total operating expenses","","","(9,366",")","","","(14,070",")","","","4,704"],["Other income, net","","","8,362","","","","1,413","","","","6,949"],["Loss from equity method investment","","","(178",")","","","(274",")","","","96"],["Net realized loss on investments","","","(339,087",")","","","\u2014","","","","(339,087",")"],["Loss on extinguishment of debt","","","(30,714",")","","","\u2014","","","","(30,714",")"],["Decrease in Specific CECL Allowance","","","338,000","","","","\u2014","","","","338,000"],["Decrease in General CECL Allowance, net","","","41,224","","","","3,289","","","","37,935"],["Gain (loss) on foreign currency forward contracts","","","(18,026",")","","","16,812","","","","(34,838",")"],["Foreign currency translation gain (loss)","","","18,920","","","","(17,148",")","","","36,068"],["Net income before taxes","","$","25,806","","","$","26,457","","","$","(651",")"],["Income tax provision","","","(27",")","","","(230",")","","","203"],["Net income","","$","25,779","","","$","26,227","","","$","(448",")"]]
[[/GREPCENT_TABLE]]

Net Interest Income

Net interest income decreased by $27.9 million during the three months ended June 30, 2026 compared to the three months ended March 31, 2026. The net decrease was attributable to the sale of our commercial real estate loan portfo

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1467760/000119312526044725/ari-20251231.htm
Complete FY 2025 MD&A: /company/ARI/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-10
Report date: 2025-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements and accompanying notes included in Item 8. "Financial Statements and Supplementary Data" of this annual report on Form 10-K.

Overview

We are a Maryland corporation and have elected to be taxed as a REIT for U.S. federal income tax purposes. We primarily originate, acquire, invest in and manage performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $938.4 billion as of December 31, 2025.

The Manager is led by an experienced team of senior real estate professionals who have significant expertise in underwriting and structuring commercial real estate financing transactions. We benefit from Apollo's global infrastructure and operating platform, through which we are able to source, evaluate and manage potential investments in our target assets.

Proposed Transactions with Athene

On January 27, 2026, we entered into the Purchase Agreement with Athene. In connection with the Asset Sale, we also entered into the Management Agreement Side Letter with Operating LLC and the Manager, and the Expense Reimbursement Letter Agreement with Apollo Management Holdings. The Company is externally managed and advised by the Manager, which is a subsidiary of Apollo, and each of Athene and Apollo Management Holdings is a subsidiary of Apollo. The Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Purchase Agreement, Athene will purchase from the Company, and the Company will sell to Athene, the Loans as of the Closing, other than two loans with a combined total principal balance of $146 million, as of December 31, 2025, currently held by the Company which are expected to be repaid prior to the Closing. Refer to "Note 20 - Subsequent Events" to the accompanying consolidated financial statements for further detail.

Current Market Conditions

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors".

Results of Operations

Our results of operations discuss fiscal years ended December 31, 2025 and 2024 items and year-to-year comparisons between fiscal years ended December 31, 2025 and 2024. Discussions of prior period items and year-to-year comparisons between fiscal years ended December 31, 2024 and 2023 can be found in our "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our annual report on Form 10-K for the fiscal year ended December 31, 2024.

Net Income (Loss) Available to Common Stockholders

For the years ended December 31, 2025 and 2024, our net income (loss) available to common stockholders was $114.4 million, or $0.81 per diluted share of common stock, and ($131.9) million, or ($0.97) per diluted share of common stock, respectively.

45

Operating Results

The following table sets forth information regarding our consolidated results of operations and certain key operating metrics for the years ended December 31, 2025 and 2024 ($ in thousands):

[[GREPCENT_TABLE]]
[["","","Year ended"],["","","December 31, 2025","","","December 31, 2024","","","Change"],["Net interest income:"],["Interest income from commercial mortgage loans","","$","625,493","","","$","699,389","","","$","(73,896",")"],["Interest income from subordinate loans and other lending assets","","","1,288","","","","3,542","","","","(2,254",")"],["Interest expense","","","(460,089",")","","","(503,949",")","","","43,860"],["Net interest income","","","166,692","","","","198,982","","","","(32,290",")"],["Operations related to real estate owned:"],["Revenue from real estate owned operations","","","104,897","","","","104,689","","","","208"],["Operating expenses related to real estate owned","","","(85,213",")","","","(81,683",")","","","(3,530",")"],["Depreciation and amortization on real estate owned","","","(11,173",")","","","(11,668",")","","","495"],["Net income related to real estate owned","","","8,511","","","","11,338","","","","(2,827",")"],["Operating expenses:"],["General and administrative expenses","","","(27,410",")","","","(29,649",")","","","2,239"],["Management fees to related party","","","(34,165",")","","","(36,120",")","","","1,955"],["Total operating expenses","","","(61,575",")","","","(65,769",")","","","4,194"],["Other income, net","","","7,872","","","","4,498","","","","3,374"],["Income from equity method investment","","","15,413","","","","\u2014","","","","15,413"],["Net realized loss on investments","","","(7,436",")","","","(128,191",")","","","120,755"],["Decrease (increase) in Specific CECL Allowance","","","4,500","","","","(149,500",")","","","154,000"],["Increase in General CECL Allowance, net","","","(7,729",")","","","(6,284",")","","","(1,445",")"],["Gain (loss) on foreign currency forward contracts","","","(98,703",")","","","52,590","","","","(151,293",")"],["Foreign currency translation gain (loss)","","","99,483","","","","(37,476",")","","","136,959"],["Gain on interest rate hedging instruments","","","23","","","","570","","","","(547",")"],["Net income (loss) before taxes","","$","127,051","","","$","(119,242",")","","$","246,293"],["Income tax provision","","","(331",")","","","(394",")","","","63"],["Net income (loss)","","$","126,720","","","$","(119,636",")","","$","246,356"]]
[[/GREPCENT_TABLE]]

Net Interest Income

Net interest income decreased by $32.3 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to lower average index rates during the year ended December 31, 2025, realization of a loss on investment during the third quarter of 2024 and modification of two of our commercial mortgage loans converting them from floating rate loans to fixed rate loans during the second quarter of 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Operations Related to Real Estate Owned

For the year ended December 31, 2025, we recorded net income related to real estate owned of $8.5 million, compared to net income of $11.3 million for the year ended December 31, 2024. The decrease in net income is primarily due to an increase in operating expenses related to the Brooklyn Multifamily Development, as the property reached substantial completion during the second half of 2025 and the lease-up of the property continues to ramp up. We recorded a net loss from the property's operations of $1.3 million during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024 as the property was still under construction with no revenue streams generated and all expenses being capitalized. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.

46

Operating Expenses

General and administrative expenses decreased by $2.2 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to a decrease in amortization of RSUs.

Management fees expense decreased by $2.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a decrease in Stockholders' Equity (as defined in the Management Agreement) during the year ended December 31, 2025.

Income from Equity Method Investment

During the year ended December 31, 2025, we recorded net income from equity method investment of $15.4 million. The increase in net income attributable to the Massachusetts Healthcare JV was due to a $17.4 million net gain on litigation settlement recorded during the year ended December 31, 2025. This income was partially offset with a net loss from operations of the Massachusetts Healthcare JV during the year ended December 31, 2025. There was no such activity during the year ended December 31, 2024, as the Massachusetts Healthcare JV did not take title of the two hospitals until the first quarter of 2025.

Refer to "Note 6 – Other Assets" and "Note 16 – Commitments and Contingencies" for additional information.

Net Realized loss on Investments

During the year ended December 31, 2025, we recorded a $7.4 million net realized loss on investments, consisting of (i) a $1.2 million realized loss on the sale of a promissory note previously recorded as Note receivable, held for sale and (ii) a $6.2 million realized loss related to the discounted payoff of the Michigan Office Loan.

Comparatively, during the year ended December 31, 2024, we recorded a $128.2 million net realized loss on investments, consisting of (i) a $127.5 million realized loss related to the extinguishment of the Massachusetts Healthcare Loan, and (ii) a $0.7 million realized loss related to the sale of a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI.

Refer to "Note 3 – Fair Value Disclosure" and "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Decrease (increase) in Specific CECL Allowance, net

During the year ended December 31, 2025, we recorded a net decrease in our Specific CECL Allowance of $4.5 million. This amount consisted of: (i) a $1.3 million reversal and a $6.2 million write-off of our allowance related to the discounted payoff of our Michigan Office Loan; and (ii) a $3.0 million allowance on a commercial mortgage loan secured by a hotel in Chicago, IL.

Comparatively, during the year ended December 31, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million related to two of our subordinate loans. This amount consisted of: (i) a $142.0 million allowance recorded in the first quarter of 2024 for a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY; and (ii) a $7.5 million allowance recorded during the second quarter of 2024 for the Michigan Office Loan. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our December 31, 2024 consolidated statement of operations.

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 6 – Other Assets" for additional detail.

47

Increase in General CECL Allowance, net

The General CECL Allowance increased by $7.7 million and $6.3 million during the years ended December 31, 2025 and 2024, respectively. The increases were primarily related to loan originations and the impacts of extending our expected loan repayment dates.

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Foreign currency translation gain and loss on derivative instruments

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the years ended December 31, 2025 and 2024 were net gains of $0.8 million and $15.1 mi

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/ARI/mda/fy2025/
All MD&A years: /company/ARI/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/ARI/mda/fy2024/): filed 2025-02-10; accession 0000950170-25-017122 (https://www.sec.gov/Archives/edgar/data/1467760/000095017025017122/ari-20241231.htm)
- [FY 2023 MD&A](/company/ARI/mda/fy2023/): filed 2024-02-06; accession 0001467760-24-000010 (https://www.sec.gov/Archives/edgar/data/1467760/000146776024000010/ari-20231231.htm)
- [FY 2022 MD&A](/company/ARI/mda/fy2022/): filed 2023-02-08; accession 0001467760-23-000004 (https://www.sec.gov/Archives/edgar/data/1467760/000146776023000004/ari-20221231.htm)
- [FY 2021 MD&A](/company/ARI/mda/fy2021/): filed 2022-02-08; accession 0001467760-22-000007 (https://www.sec.gov/Archives/edgar/data/1467760/000146776022000007/ari-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6798 Real Estate Investment Trusts) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate

Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/ARI.md · JSON record: /company/ARI.json · verified financials: /company/ARI/financials.json / /company/ARI/financials.csv · machine TOC for the whole site: /llms.txt