SCHEDULE: ACRES Commercial Realty Manager Stake Rises to 16.07%

ACRES Share Holdings, an affiliate of the Manager, increased its beneficial ownership in ACRES Commercial Realty Corp. to 16.07% through recent incentive plan grants and compensation issuances.

Summary

• ACRES Share Holdings, LLC, an affiliate of the Manager, now beneficially owns 1,171,112 shares of ACRES Commercial Realty Corp. Common Stock.
• This represents 16.07% of the outstanding Common Stock, based on 7,285,680 shares as of September 30, 2025, as reported in the Issuer's Form 10-Q.
• The increase in ownership is primarily due to several grants and issuances under the ACRES Commercial Realty Corp. Manager Incentive Plan and the Management Agreement for incentive compensation.
• Recent grants include 295,237 shares on May 7, 2024, and 204,765 shares on March 5, 2026, both triggered by the Issuer's book value targets being met.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive update, reflecting the achievement of book value targets and increased alignment between management and shareholder interests through equity grants.

Positives

• The Issuer's book value targets of $27.00 and $30.01 were met, leading to the issuance of restricted shares to the Manager's affiliate, indicating potential operational success and value creation.
• The Manager's increased stake aligns its interests with those of shareholders, potentially fostering a stronger commitment to long-term performance.

Future Outlook

The Issuer will grant up to 333,333 additional restricted shares under equity compensation plans to the Reporting Persons when future book value targets of $33.00 and $36.00 are met.

Management Comments

• Voting and dispositive power over shares held by the Manager are exercised by the board of directors of ACRES Capital Corp. Each of the five directors of ACRES Capital Corp., which include Messrs. Fentress and Fogel, Chairman and CEO/President, respectively, of the Issuer, has one vote, and the approval of a majority is required to approve an action.
• Under the so-called 'rule of three' if voting and dispositive decisions regarding an entity's securities are made by three or more individuals, and voting or dispositive decisions require the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity's securities.

Industry Context

StockSavvy.ai notes that beneficial ownership filings like this Schedule 13D Amendment are standard for reporting significant changes in ownership by large shareholders or affiliated entities. The structure of incentive compensation tied to book value targets is a common practice in the REIT sector to align management incentives with shareholder value creation, particularly in a capital-intensive industry like commercial real estate.

Comparison to Industry Standards

• The use of book value targets for incentive compensation is a common practice among REITs and other real estate investment vehicles, aiming to align management performance with tangible asset growth.
• The 16.07% beneficial ownership by an affiliated manager is a substantial stake, which can be viewed positively as it demonstrates a strong commitment from the management team, similar to other internally managed REITs where management holds significant equity.
• The 'rule of three' disclosure regarding voting power is a standard legal interpretation for beneficial ownership reporting, ensuring compliance with SEC regulations for entities with shared decision-making.

Related Party Transactions

• The Issuer granted shares of common stock to ACRES Share Holdings, LLC, an affiliate of the Manager, under the ACRES Commercial Realty Corp. Manager Incentive Plan.
• The Issuer issued shares of common stock to ACRES Share Holdings, LLC pursuant to the Management Agreement for incentive compensation.

Stakeholder Impact

• Shareholders: The increased beneficial ownership by the Manager's affiliate could be seen as a positive alignment of interests, potentially leading to more focused management on increasing shareholder value. The achievement of book value targets suggests underlying asset performance.
• Management/Employees: The grants and issuances serve as incentive compensation, rewarding the Manager for achieving performance milestones and motivating future performance.

Next Steps

• Future grants of up to 333,333 restricted shares when book value targets of $33.00 and $36.00 are met.

Key Dates

Recommendation

This filing primarily updates beneficial ownership information and details incentive-based share grants to the company's manager. While the achievement of book value targets is positive, indicating operational performance, this is not new information that would fundamentally alter the investment thesis. The increased alignment of interests is a minor positive, but without further operational or financial updates, a 'hold' recommendation is appropriate as it doesn't present a strong catalyst for immediate 'buy' or 'sell' action.

Keywords

ACRES Commercial Realty Corp, ACRES Share Holdings, Schedule 13D, Beneficial Ownership, Common Stock, Manager Incentive Plan, Equity Compensation, Book Value Targets, Real Estate Investment Trust, REIT