Good afternoon, everyone. Welcome to the Aries Commercial Real Estate Corporation's first quarter earnings conference call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded on Thursday, May 7, 2026. I will now turn the call over to Mr. John Stilmar, partner of Public Markets Investor Relations. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us on today's conference call. In addition to our press release in the 10-Q that we filed with the SEC, we've posted an earnings presentation under the Investor Resources section of our website at www.AriesCRE.com. Before we begin, I want to remind everyone that comments made during the course of this conference call and webcast, as well as the accompanying documents, contain forward-looking statements and are subject to risks and uncertainties. Many of these forward-looking statements can be identified by the words such as anticipates, believes, expects, intends, will, should, may, and similar such expressions. These forward-looking statements are based on management's current expectation 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 the forward-looking statement as a result of a number of risk factors, including those listed in its SEC filings. Aries Commercial Real Estate Corporation assumes no obligation to update any such forward-looking statements. During this conference call, we 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, Brian Donahoe.

Thanks, John. Good afternoon, everyone, and thank you for joining us. I'm here today with Jeff Gonzalez, our CFO, Tasek Yoon, our COO, as well as other members of the management and investor relations teams. During the first quarter, the commercial real estate market exhibited relative stability despite broader macroeconomic and corporate credit market uncertainty. Fundamentals in commercial real estate showed strength as limited forward supply supported modest valuation growth. The combination of reset valuations and what we believe is the beginning of capital rotation into the asset class helped create what, in our view, is an attractive investment environment. With this backdrop, we continue to make progress against our strategic objectives of reducing risk in our portfolio while investing in attractive, high-quality commercial real estate loans. We closed three new loan commitments, totaling $294 million during the first quarter, collateralized by multifamily, mixed-use, and retail properties. This origination activity supported steady growth in the loan portfolio for the second consecutive quarter. At the end of the first quarter, the portfolio of loans held for investment grew to 35 loans and $1.7 billion, an increase of $110 million quarter-over-quarter. Notably, 37% of the investment loan portfolio balance was originated in the past 12 months. We believe today's commercial real estate environment offers the opportunity to originate at attractive attachment points with stronger credit structures and risk-adjusted returns. ACRE is committed to approximately $780 million in new loans in the last 12 months with more than 75% of the dollars committed through co-investments alongside other Aries Management-affiliated vehicles. This represents just a portion of the nearly $10 billion in new loan commitments across the Aries Real Estate Debt Platform in the last 12 months. The scale of the ARIES real estate debt platform and capital base is a key differentiator, enabling disciplined selectivity and access to high-quality opportunities while providing ACRE with co-investment opportunities that enhance portfolio diversification and support efficient capital deployment. We believe that this deployment reflects success against our goals for the portfolio that we laid out one year ago. As of March 31, 2026, we have increased the outstanding principal balance of the portfolio by 22% year-over-year, while improving portfolio diversification and reducing the office loan balance by nearly 25%. Consistent with our strategic objectives, the reduction in office loans was reallocated and redeployed into other attractive property types, including industrial, multifamily, select retail, and self-storage. We also continued to improve portfolio quality through active resolution efforts on our risk-graded 4 and 5 loans. During the quarter, we accelerated the resolution and exit of a legacy $28 million Pennsylvania multifamily loan, contributing to a year-over-year and quarter-over-quarter decline in the number of risk-graded 4 and 5 loans. With respect to the total portfolio of loans held for investment, 31 of our 35 loans carry a risk rating of 1 through 3. There were no negative credit migrations during the first quarter within the risk-rated 1 to 3 loan portfolio. While the majority of the loan portfolio continues to exhibit sound credit performance, certain idiosyncratic risks persist in the sector and Acre's portfolio. These cases are driven by discrete local market dynamics or property-specific factors that may not align with the aforementioned commercial real estate trends. Now, let me walk you through the largest two of these four loans, which comprise more than 90% of the outstanding principal balance of the total risk-rated four and five loans as of March 31, 2026. The largest of these loans is a risk-rated five Chicago office loan. This loan remains on non-accrual, but continues to make its contractual interest payments, which are applied to the basis. Property fundamentals remain stable, with occupancy above 90%, a weighted average lease term of approximately eight years, and positive net cash flow. We remain engaged with the borrower on their ongoing sales process. It is, unfortunately, taking longer than we anticipated. We increased our CECL reserve for this loan by approximately $5 million to reflect our most current market indications for the potential sale of this property. The second largest risk-graded 4-in-5 loan is a risk-graded 4 residential condominium loan located in Brooklyn, New York. This loan also remains on non-accrual. The preliminary condominium sales process began earlier this year, and as a reminder, initial sales proceeds will be used to pay down debt associated with the project, while subsequent sales are expected to generate cash flow back to the company. As the project nears completion and with increased visibility into final construction costs, we have incorporated incremental costs and adjusted the timing into the business plan. These updates are also reflected in the CECL reserve analysis for the first quarter, and combined with the reserve increase for the risk-rated 5 office loan, were the primary drivers of the overall CECL reserve increase during the quarter. As it relates to our North Carolina office REO, we began the formal sales process for this property this quarter. This decision was supported by improved property fundamentals and capital markets activity. Notably, in the fourth quarter of 2025, we recognized a gain related to the partial sale of this property, and as of the end of the first quarter, the remaining property was reclassified as held for sale. In closing, we remain highly focused on our current objectives of reducing our risk-rated four-in-five loans and addressing office and REO loans while opportunistically investing into new loans. Let me now turn the call over to Jeff, who will provide more details on our second quarter results.

Thank you, Brian. For the first quarter of 2026, we reported a gap net loss of approximately $9.6 million, or 17 cents per diluted common share. Our distributable earnings for the first quarter of 2026 was approximately $3.2 million, or $0.06 per diluted common share. This includes the impacts from the realized loss of $3.3 million or $0.06 per diluted common share related to the exit of the risk-rated five Pennsylvania multifamily loan. Distributable earnings for the first quarter excluding this loss was approximately $6.5 million or $0.12 per diluted common share. Additionally, during the first quarter, we collected $2.1 million or $0.04 per dilutive common share of cash interest on loans that were on non-accrual and was accounted for as a reduction in our loan basis. We continued to maintain our strong balance sheet position with moderate leverage, which supports further resolutions of underperforming loans and future growth. We ended the first quarter with a net debt-to-equity ratio, excluding CECL, of 1.9 times. Our portfolio of loans held for investment reached $1.7 billion as of March 31st, 2026, with the majority of our loans collateralized by multifamily and industrial properties. Looking at the $294 million of new loan commitments made in the first quarter, $225 million of these new loan commitments are classified as loans held for investment, and $69 million is classified as held for sale as of March 31st, 2026. The $69 million loan classified as help for sale corresponds to a larger $144 million senior loan commitment collateralized by retail property in California. $75 million of this loan will be retained by Acre and is classified as help for investment. The remaining $69 million of the loan is expected to be sold to either an ARIES-affiliated fund or a third-party investor during the second quarter. Notably, until the sale is completed, ACRE will accrue interest and fee income associated with this loan. Let me take a minute to discuss the strategy behind this action. We believe this specific loan structure provides a strategic opportunity for ACRE to selectively deploy its available liquidity on a short-term basis, capturing attractive economics on high conviction loans that we intend to hold a portion of on a long-term basis while still maintain diversity across the broader portfolio. Ultimately, we believe this strategy is another example of how Acre can leverage the robust capabilities and broad market presence of the Aries real estate platform. As we reshape the portfolio through asset resolutions and new investments, we continue to prioritize strong liquidity and disciplined liability management. During the first quarter, we collected $94 million in repayments, further strengthening our liquidity position. As of March 31, 2026, our available capital was $163 million, including $86 million of cash. In addition, during the quarter, we increased our borrowing capacity by $300 million, subject to future available collateral, as well as reduced our borrowing costs through three distinct actions. We upsized the Morgan Stanley facility to $350 million, dollars, an increase of 200 million dollars from the prior quarter, and extended the facility by three years. Second, we upsized the Citibank facility to 425 million dollars, an increase of 100 million dollars from the prior quarter. Lastly, as mentioned on our last earnings call, we reduced the cost of our borrowing through the redemption of our FL4 CLO securitization. We believe these actions reflect the strength and scale of our lender relationships driven by the ARIES platform and positions us well to access attractive financing and to support future growth initiatives. Additionally, our financial flexibility allows us to further address our higher risk-rated loans as well as invest in new loans, resulting in what we believe is a more stable portfolio. As Brian mentioned, we exited a risk-rated 5 loan and had no negative credit migrations in the risk ratings across the portfolio in the first quarter. Turning to our CECL reserve, the total CECL reserve increased to $138 million as of March 31, 2026, an increase of approximately $11 million from the CECL reserve as of December 31, 2025. This increase was primarily driven by a $15 million combined increase in the reserves for our risk-graded 4 and 5 loans, specifically the two largest loans Brian previously mentioned, as well as a $2 million reserve increase related to the new loans closed in the quarter. These increases were partially offset by the previously mentioned realized loss in connection with the exit of the risk-graded 5 Pennsylvania multifamily loan and other macroeconomic and loan specific attributes. The total CISO reserve at the end of the first quarter of $138 million represents approximately 8% of the total outstanding principal balance of our loan self investment. 94% of our total CISO reserve, or $129 million, relates to our risk-graded 4 and 5 loans, and approximately half of the total CISO reserve is attributed to the only risk-graded 5 loan in the portfolio. Overall, the $129 million of reserves attributed to our risk-graded 4 and 5 loans represents approximately 35% of the outstanding principal balance of those risk-graded 4 and 5 loans. Our book value is $889 per share, which includes the $138 million CECL reserve. Our goal remains to prove out book value over time while advancing our efforts to rebuild earnings and cover our dividend, which we believe is achievable. So far in the second quarter, we have continued to execute against our objectives with the closing of $95 million of new loan commitments collateralized by multifamily and self-storage properties. These are both high conviction property types across the area's real estate platform, and both loans represent co-investment loan opportunities. To conclude, the board declared a regular cash dividend of 15 cents per common share for the second quarter of 2026. The second quarter dividend will be payable on July 15th, 2026 to common stockholders of record as of June 30th, 2026. Current stock price on May 4th, 2026, the annualized dividend yield on our second quarter dividend is approximately 11.5%. With that, I will turn the call back over to Brian for some closing remarks.

Thank you, Jeff. As we sit here today with the first quarter of 2026 under our belts, We are excited about the opportunities that lay ahead. We believe Acre is uniquely positioned to capitalize on ARI's powerful and growing real estate platform, depth of capabilities, and robust pipeline to create shareholder value. As always, we appreciate you joining our call today, and we'd be happy to open the line for questions.

Thank you, Mr. Donahoe. Ladies and gentlemen, at this time, if you have any questions, please press star 1. Additionally, you can remove yourself from the queue by pressing star 2. Once again, star one for any questions. We'll go first today to Jade Romani with KBW.

Thank you very much. Do you have any updated thoughts as to potential timeline for resolution on the Chicago RISC-V? And also, you know, over what time period do you expect the Brooklyn condo RISC-V to, you know, be amortized down based on condo sales? Is that going to take, you know, do you think two years, three years? If you could just provide any commentary on that.

Yeah, thanks for the question, Jade. I think, as you can tell from our prepared remarks today and in prior quarters, these assets remain one of our primary focus points. I think the short answer is we're getting closer, and the outcomes have certainly narrowed. Um, we, we do need, uh, the functioning market, which I think we've seen over the past six to nine months, some return of capital back into the office sector and a, and a process that is well underway, but, but that is a little bit outside of our control, um, with respect to the Brooklyn condominium asset, uh, as you heard in the remarks as well, we're largely through the, the construction phase and, and, uh, began the sales process last quarter. So that'll be a function of demand for the product, which we think is fairly priced for the landscape in which we're all sharing. A sellout can obviously vary, but it's fair to say it's inside of two years would be the general expectation for a similarly sized project.

Thank you. And then just more broadly in terms of how ARIES is looking at the debt capital markets in commercial real estate, where do you see the best opportunities risk-adjusted at this point?

Do you mean in terms of sectors or what specifically?

Yeah, thematics, if it's sector, property-type geography, or if it's participation in certain capital structures, any nuances that you care to provide?

Yeah, of course. I think that as it relates to Acre, Acres, obviously, we talk over the past five years really about the disadvantages being subscale. But certainly when we think about the broad landscape of opportunities in real estate credit across the U.S., and you're talking kind of a $5 trillion market opportunity, there's plenty to do. So the overall theme that you and I have covered in the past still relates to banks being very driven to provide capital and back leverage, and that has provided us the opportunity to really go lower on the risk spectrum but still create ROEs that are in keeping with our historical norms. As it relates to sectors, you've seen us pivot at times through logistics, student housing, multi-seniors to some degree, and obviously underweight office as we sit here today and on a go forward. So our focus remains on lower CapEx cycle asset classes, and then we're looking at the fundamentals both from supply, demand, and otherwise, and geographical focus that has really ebbed and flowed over the past three or four years. I mean, I know you all have had questions on Sunbelt assets for some different operators and different lenders in the space, and I think location continues to matter, as does vintage. So you'll see us find, given the broad landscape in which we participate, plenty to do given the size of Acres balance sheet.

Thanks very much.

Thank you. We'll go next now to Chris Muller with Citizens Capital Markets.

Hey, guys. Thanks for taking the question. I guess on the $3.3 million realized loss, and sorry if I missed this in your guys' prepared remarks, but can you just break that down for me? Is that related to the REO property being reclassified as held for sale? or the resolution of the five-rated loan, or is it a combo of both of those?

Thanks for the question, Chris. Yes, it is related to the Pennsylvania multifamily loan. All of it is. As we disclosed in our filings, when we transferred the REO office property to help for sale, there was no impairment loss associated with that. So it's all related to the multifamily loan.

Got it. That's helpful. And it's nice to see no downward credit migration in the quarter. Do you guys feel that credit has largely stabilized? And then, I guess, how are you thinking about new originations in 2026? Is 1Q a decent run rate for deployment?

Yeah, look, the overall market is certainly constructive. I said earlier that we've seen capital flow back into the sector, broadly speaking, both debt and equity. We've seen stability in values or modest appreciation. and that's obviously in the face of rates that have risen in the U.S. and certainly across Europe as well. So I think people believe in the fundamental story of hard assets with low degrees of obsolescence out there, and I think those capital flows are supportive of valuations. So we have got a pretty constructive backdrop in which to invest right now. So what does that mean for forward originations? I think largely that will be dictated by the repayment schedule of the loans that are in the portfolio today, alongside the resolution of those focus assets that you heard about earlier and you've heard about in prior quarters as well.

Got it. That's very helpful. Thanks for taking the questions, and congrats on the continued progress.

Thanks for the questions. Thank you. And just a reminder, ladies and gentlemen, star one, please, for questions today. We'll go next now to Gabe Pogge with Raymond James.

Hey, good afternoon. Good morning. Thanks for taking the question. Kind of piggybacking on the last one, how do you think about leverage, right, while you're working through the four and the five loans and REO? Is there a leverage level that you're comfortable going to while you wait for resolutions there? You guys have gone from kind of one turn in 3Q25 to now two turns. Can we see another full turn of leverage even if the watchlist loan capital slash REO capital still is in TBD zone?

Yeah, it's a great question, Gabe. I'd say the answer probably lies somewhere in between. We've taken a bifurcated approach to the portfolio, as you've seen over prior quarters, where what we wanted to have and we've proven we did have is the flexibility to accelerate resolutions on assets where we wanted to move on. And I think the life science asset of a few quarters ago, you saw us do that, not the outcome that we had hoped for, but one that we think looks better today than it even did then, given the headwinds in that sector by way of reference. So we maintain almost this lower leverage approach to the legacy assets, right, things that we touched on in terms of those focus assets of fours and fives, et cetera. But we, I think, have proven that there is ample capital available to leverage new originations and to do so very accretively. So as we increase that confidence interval on the resolution of those four and fives, as we touched on, you'll see really that de novo portfolio, really the assets that are post-25 or post-24 environment be a larger percentage of the portfolio, and with that will come higher leverage. So certainly as we move towards that to get towards the historical three turns of leverage, you'll see a push in that direction over time.

That makes sense. And then a quick follow-up, just so I understand. On the $144 million retail loan in California, that was a co-invest with ARIES, ARIES, and then the REIT is splitting the 144, I guess, and ARIES into call it, is it called

A note, B note? Is that the way to think about it? Nothing senior sub, so all the sharing is on a peri-pusu basis, but it's a larger loan overall and shared across different vehicles within the ARIES family, I would say. Got it. Okay. No, that helps. Thank you.

Thank you. And, gentlemen, it appears we have no further questions today. Mr. Donahoe, I'd like to turn things back to you, sir, for any closing comments.

Yeah, thank you. I just want to thank everybody for their time today and the team for all the work this quarter. We appreciate your continued support of Aries Commercial Real Estate and look forward to speaking with you all on our next earnings call.

Thank you, and have a good afternoon. Thank you, Mr. Donahoe. Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of the conference will be available approximately one hour after the end of this call through June 7, 2026 to domestic callers by dialing 1-800-839-4016 and to international callers by dialing 1-402-220-7240. An archive replay will also be available on a webcast link located on the home page of the Investor Resources section of our website. Again, thanks so much for joining us, everyone. We wish you all a great day.