ACRES COMMERCIAL REALTY CORP. ANNOUNCES COMPLETION OF MERGER, INTERNALIZATION AND PRIVATE NOTES OFFERING

ACRES Commercial Realty Corp. has finalized its acquisition of ACRES Capital Corp. in an all-stock transaction, marking a significant strategic shift for the company. This merger, completed on August 6, 2026, allows ACRES Commercial Realty to transition from an externally-managed real estate investment trust (REIT) to an internally-managed structure. As part of the deal, approximately 7.5 million shares of ACRES Commercial Realty common stock were issued to stockholders of ACRES Capital Corp., effectively consolidating the two entities under a unified management approach.

The acquisition of ACRES Capital Corp. aligns with ACRES Commercial Realty's strategic objectives to enhance operational efficiency and streamline decision-making processes. By internalizing management, the company aims to reduce costs associated with external management fees and improve its ability to respond to market dynamics. The merger is expected to create a more agile organization, better positioned to meet the evolving needs of its clients in the commercial real estate sector.

In conjunction with the acquisition, ACRES Commercial Realty also announced a private placement of $200 million in Senior Secured Notes, which will mature in 2031. The proceeds from this offering will be utilized to repay existing unsecured notes and support general corporate purposes. This financial maneuver not only strengthens the company's balance sheet but also reflects a commitment to maintaining a robust capital structure as it embarks on this new phase of growth.

The commercial real estate market has been experiencing notable shifts, driven by changing consumer preferences and economic conditions. The transition to an internally-managed REIT comes at a time when many investors are seeking greater transparency and alignment of interests between management and shareholders. By consolidating its operations and enhancing its governance structure, ACRES Commercial Realty is positioned to capitalize on emerging opportunities in sectors such as multifamily housing, student accommodations, and industrial properties.

Looking ahead, the merger and internalization are expected to have broader implications for the real estate investment landscape. As companies like ACRES Commercial Realty adapt to the demands of a rapidly evolving market, the trend towards internal management structures may gain traction among other REITs. This shift could lead to increased competition and innovation within the sector, ultimately benefiting investors and stakeholders as firms strive to deliver enhanced value and performance.