Ladder earnings increased in the third quarter of 2026, with distributable earnings reaching $44.7 million, or $0.35 per share, as a Jacksonville office-campus sale supported results. The commercial real estate lender announced the figures on October 16 for the quarter ended September 30, while reporting $703 million of new investments, mostly in highly rated securities rather than loans.
Key Takeaways
- Distributable EPS rose to $0.35 from $0.24 in the second quarter, after a credit-loss charge-off.
- Securities purchases accounted for $481 million of the quarter’s $703 million in new investments.
- Two nonaccrual loans totaled $61 million, while management said known credit problems were not worsening.
Table of Contents
- Ladder earnings benefit from Jacksonville property sale
- Securities purchases outpace new lending
- Funding mix supports rate sensitivity, but credit risks remain
- Buybacks continue alongside investment spending
- Conclusion
Ladder earnings benefit from Jacksonville property sale
Ladder Capital’s third-quarter 2026 results announcement showed distributable EPS of $0.38 before the charge-off of an allowance for credit losses, compared with $0.24 in the preceding quarter. After the $3.5 million charge-off, distributable EPS was $0.35.
Distributable earnings is a non-GAAP performance measure that adjusts for items including depreciation, certain unrealized gains and losses, and timing differences. It is distinct from GAAP net income attributable to common shareholders, which totaled $65.9 million, or $0.53 per diluted share.
The sale of a net lease office campus in Jacksonville, Florida, generated a $31 million gain on a distributable basis and approximately $66 million under GAAP. The difference matters because Ladder’s distributable-earnings calculation removes the portion of real estate sale gains associated with previously recognized depreciation and amortization.
Undepreciated book value increased to $13.50 per share from $13.44, net of a $0.35-per-share credit-loss reserve.
| Item | Details |
|---|---|
| Net interest income | $28.8 million in Q3, compared with $28.2 million in Q2 2026. |
| Fixed-rate debt coupon | Weighted average coupon of 5.3%. |
| Unsecured funding | 69% of total debt. |
| Unencumbered assets | 73% of total assets. |
| Net lease property portfolio | 148 properties with an average remaining lease term of 6.4 years. |
Securities purchases outpace new lending
Ladder invested $481 million in predominantly AAA-rated securities and originated seven balance-sheet loans totaling $222 million during the quarter. Year-to-date loan originations reached $1.4 billion, matching the company’s 2025 volume.
Chief Executive Brian Harris said higher interest rates had slowed acquisition pipelines as deals fell through and buyers sought lower prices. Ladder shifted capital toward securities, which management described as a liquid place to hold funds while retaining flexibility to make loans.
The securities portfolio stood at approximately $2.3 billion, with a weighted average yield of 5.5% and a weighted average duration of about three years. Some 99% was investment-grade and 97% was AAA-rated. Those ratings describe credit quality, not protection against changes in market value.
Funding mix supports rate sensitivity, but credit risks remain
Ladder reported $784 million of liquidity, including same-day revolving credit capacity, alongside $1.2 billion of unencumbered, primarily AAA-rated securities. Adjusted leverage was 2.5 times.
Floating-rate assets represented 92%, or $4.8 billion, of interest-earning assets, while 57% of debt carried fixed rates. Management estimated that each 25-basis-point increase in SOFR would add approximately $0.01 per share to quarterly distributable earnings. That is a sensitivity estimate, not an earnings forecast.
Two loans were on nonaccrual status, with a combined carrying value of $61 million: a Los Angeles hotel loan and a Minneapolis office loan. The $3.5 million charge-off related to the Minneapolis loan, reducing its carrying value to $9.9 million.
The credit-loss reserve was approximately $44 million, or 1.48% of the loan portfolio. Harris said known credit problems were stable and described the reserve as adequate; that assessment remains management’s judgment.
Buybacks continue alongside investment spending
Ladder repurchased $8.2 million of shares in the third quarter at a weighted average price of $9.38. Year-to-date repurchases totaled $29.6 million, leaving $83.8 million available under the authorization.
Harris said the company intended to continue buying shares near prevailing price levels, subject to bondholder considerations. The remaining authorization permits purchases but does not commit Ladder to complete them.
The company also declared a $0.23-per-share third-quarter dividend, paid on October 15, 2026.
Conclusion
The next operating milestone is the expected repayment of more than $100 million of older loans before year-end 2026. Harris said he fully expected those repayments, but they had not yet occurred; their completion would further reduce Ladder’s legacy loan exposure.
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