NEW YORK--(BUSINESS WIRE)--Ladder Capital Corp (“Ladder” or the “Company”) (NYSE: LADR) today provided an update on its liquidity and certain steps the Company has taken to position itself for continued success amid the current market volatility related to the global COVID-19 pandemic. As of today, the Company has increased unrestricted cash to more than $600 million, nearly double the Company’s unrestricted cash as of its previous market update on April 2, 2020.
“Ladder Capital was built during the financial crisis of 2008, and maintaining financial strength and risk mitigation have always been part of our company’s DNA,” said Brian Harris, Founder and Chief Executive Officer of Ladder Capital. “We have taken proactive steps in the face of these unprecedented times in order to enhance our liquidity position and preserve the flexibility we need to continue to operate and succeed in the present market environment. With over $600 million of unrestricted cash, a sizable portfolio of unencumbered assets and positive cash flows from ongoing operations, we are confident that we are well-positioned to weather the current market volatility and capitalize on the wide range of investment opportunities we see ahead.”
The Company’s sources of increased liquidity in March and April included regular cash inflows on Ladder’s portfolios of loans, securities, and income producing real estate investments, the repayment of $203 million of maturing loans, financing of assets in ordinary course and the sale of $380 million of loans and securities at an average price of 96% of par.
As part of Ladder’s focused efforts to enhance liquidity and preserve financial flexibility in the face of uncertain macroeconomic conditions, Ladder has also reduced expenses, including by modifying selected vendor contracts and employee benefits and reducing headcount. Ladder expects its cost reduction efforts will result in annualized savings of approximately $3 million.
As previously announced, on January 30, 2020, Ladder closed its offering of $750 million senior unsecured notes due 2027, which represented the largest single-tranche senior unsecured notes offering issued in the commercial mortgage REIT sector since Ladder’s inception in 2008. This offering enabled Ladder to unencumber a significant portion of its assets, and repay outstanding secured debt financing. As of today, Ladder has $1.9 billion of unsecured corporate bond debt outstanding, with its earliest maturity not until August 2021.
The Company currently has over $6 billion of assets, including more than $2.3 billion of unencumbered assets, predominantly comprised of first mortgage loans that serve as a source of potential additional liquidity.
Ladder Capital Corp (NYSE: LADR) is an internally-managed commercial real estate investment trust with over $6 billion of assets. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns. As one of the nation’s leading commercial real estate capital providers, we specialize in underwriting commercial real estate and offering flexible capital solutions within a sophisticated platform.
Ladder originates and invests in a diverse portfolio of commercial real estate and real estate-related assets, focusing on senior secured assets. Our investment activities include: (i) our primary business of originating senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures; (ii) investing in investment grade securities secured by first mortgage loans on commercial real estate; and (iii) owning and operating commercial real estate, including net leased commercial properties.
Founded in 2008, Ladder is run by a highly experienced management team with extensive expertise in all aspects of the commercial real estate industry, including origination, credit, underwriting, structuring, capital markets and asset management. Members of Ladder’s management and board of directors are highly aligned with the Company’s investors, owning over 10% of the Company’s equity. Led by Brian Harris, the Company’s Chief Executive Officer, Ladder is headquartered in New York City with regional offices in California and Florida.
Forward-Looking Statements & Coronavirus Risk
This press release contains “forward-looking statements.” Statements regarding our annualized savings and the impact of market volatility on our future business, results of operations and financial position are forward-looking statements. These statements are based on management’s current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. These forward-looking statements are only predictions, not historical fact, and involve risks and uncertainties, as well as assumptions. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. For example, we may not be able to realize our expected cost savings on a timely basis, or at all, and we cannot predict the severity or duration of the COVID-19 pandemic or its impact on our business, results of operations or financial position. While Ladder believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect actual results. There are a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein including, most prominently, the risks discussed herein and under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as well as its consolidated financial statements, related notes, and other financial information appearing therein, and its other filings with the SEC. Such forward-looking statements are made only as of the date of this release. Ladder expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.