Acres Commercial Realty: The High-Yielding Preferred Stock Could Be Interesting
Acres Commercial Realty (ACR) specializes in first mortgage loans, with 80% of its portfolio tied to multifamily properties, and manages a $2.2 billion asset base. The company's preferred shares, particularly the Series C, offer a high 9.6% yield with floating rate features, presenting a compelling income opportunity despite modest dividend coverage. Management has maintained strong credit performance, with minimal loan losses over five years. The common stock is viewed as speculative, dependent on successful portfolio expansion, with upcoming results as a potential catalyst.
- ▪Acres Commercial Realty focuses on first mortgage loans, with 80% of its portfolio backed by multifamily properties.
- ▪The company's Series C preferred shares (ACR.PR.C) offer a 9.6% yield with floating interest rates.
- ▪Management has reported only $4.8 million in realized loan losses on $368 million of troubled loans over five years.
- ▪The firm plans to grow its $2.2 billion asset base, with Q1 results and portfolio expansion seen as key catalysts.
- ▪The Investment Doctor considers ACR's common shares speculative but views the preferred shares as having an attractive risk/reward profile.
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