Ladder Capital Q3 Loan Book Nears $3 Billion, Nonaccruals Fall 53%

Ladder Capital's loan book grew about 33% this year to $2.95 billion while its nonaccrual loans fell by more than half, to $60.6 million, the commercial real estate lender's quarterly report shows. The 10-Q, which EDGAR lists as filed Monday, Oct. 26, fills in the detail behind the third-quarter results Ladder released on Friday, Oct. 16.

Ladder (NYSE: LADR) reported distributable earnings of $44.7 million, or $0.35 a share, up from $0.24 in the second quarter. Before a $3.5 million charge-off, distributable earnings were $0.38 a share. GAAP income before taxes was $67.3 million, or $0.53 a diluted share. The company declared a $0.23 dividend.

What drove Ladder's third-quarter earnings?

Mostly a property sale. In August, Ladder sold an office property in Jacksonville, Florida, for $166.3 million, against a net book value of $100.7 million, and booked a $65.6 million GAAP gain, the 10-Q says. Because distributable earnings strip out past depreciation, that measure counted a smaller gain.

Chief Executive Brian Harris said in the earnings release that Ladder "realized a meaningful gain on the sale of a net lease office asset" and has "a balance sheet built to benefit from higher rates."

How is Ladder's loan book performing?

Better than at the start of the year. On Sept. 30, Ladder had two loans on nonaccrual with an amortized cost of $60.6 million: a $50.7 million hotel loan, recently converted from multifamily, and a $9.9 million office loan. On Dec. 31, it had four nonaccrual loans totaling $129.7 million.

The $3.5 million charge-off was on part of a loan backed by an office property in Minneapolis. The allowance for credit losses on loans fell to $43.6 million from $47.1 million on Dec. 31. Ladder took four properties through foreclosure in the first half, the 10-Q shows: a New York multifamily portfolio ($61.7 million fair value), a hotel in Canton, Ohio ($12.1 million), and offices in Portland, Oregon ($5.9 million) and Birmingham, Alabama ($8.3 million).

Measure	Sept. 30, 2026 or Q3
Mortgage loans, amortized cost	$2.95 billion (Dec. 31: $2.22 billion)
Balance sheet first mortgage loans	93 loans, 68.5% weighted average LTV
Loan fundings, Q3	$200.4 million (Q2: $491.7 million)
Weighted average loan yield	7.4% (June 30: 7.2%)
Multifamily / office loans	$1.78 billion / $639.5 million
Nonaccrual loans	$60.6 million (Dec. 31: $129.7 million)

Source: Ladder Capital Form 10-Q for the period ended Sept. 30, 2026.

About 89.9% of the loans float over Term SOFR, all with rate floors. The company also bought $481.0 million of securities in the quarter.

How does Ladder fund its loans?

Ladder relies mainly on unsecured corporate debt. Of $4.36 billion of debt principal on Sept. 30, about $3.0 billion was unsecured: $2.22 billion of senior notes, $508.0 million drawn on a $1.25 billion revolver priced at Term SOFR plus 1.25%, and a $275.0 million term loan at Term SOFR plus 1.40%. The two CLOs it sponsored were redeemed in 2025.

Its committed loan repurchase facilities, the kind of lines described in our warehouse line of credit guide, total $570.0 million, with $107.5 million drawn. Securities repo borrowings were $874.8 million at an average 4.35%. Borrowings secured by loans equaled just 3.6% of the loans' carrying value, at a weighted average rate of 5.3%. Ladder said it held a $4.5 billion pool of unencumbered assets.

Because the revolver and term loan float over SOFR, the lender's cost of funds moves with benchmarks. See hard money and private lending rates today for current SOFR, prime and Treasury levels. For a lender funded mainly with CLOs and secured credit agreements, compare our report on TPG RE Finance's Plano foreclosure loss.