Arbor Reports Mixed Q2 Results Amid Challenging Rate Environment

Arbor Realty Trust, a nationwide real estate investment trust (REIT) and direct lender specializing in multifamily and single-family rental (SFR), reported net income for the second quarter of 2025 of $24 million, or 12 cents per diluted common share, a significant drop from the net income of $47.4 million, or 25 cents per diluted share, that the company reported in the second quarter of 2024.

Arbor also declared a cash dividend on common stock of 30 cents per share.

The company did announce significant improvements to the right side of its balance sheet, including the close of Arbor’s first build-to-rent collateralized securitization vehicle, totaling $801.9 million, and raising $500 million in July to pay off all of the company’s convertible debt and add $200 million in additional liquidity to fund growth in the company’s platform.

Ivan Kaufman, Arbor’s chairman and CEO, referred to the capital raise on the company’s second-quarter earnings call as “a tremendous accomplishment, especially in this environment,” and noted that the offering was rated BB by both Moody’s and Finch.

“This reinforces the quality of our platform and the value of our diversified business model,” Kaufman said on the call. “Clearly, having access to this highly liquid market will allow us to further diversify our funding sources, push out and stagger our long-term debt maturities, and continue to grow our platform and drive strong terms on our capital.”

That said, Kaufman acknowledged the effect of the challenging market environment on Arbor’s 2025 performance to date.  

“The prolonged elevated rate environment has created a very challenging climate that is affecting the agency origination business,” said Kaufman. “We continue to see a tremendous amount of volatility and uncertainty in the market.”

But Kaufman also noted that July was an especially strong month for Arbor, leading to optimism regarding the rest of the year.   

“In the agency business, we originated $850 million of loans in the second quarter, and $1.5 billion for the first six months of the year,” said Kaufman. “We had an incredibly strong July, originating an unprecedented $1 billion of agency loans, which includes a large deal that we have been working on for several months. We also have a very large pipeline, which we believe could result in originating approximately $2 billion in the third quarter, which would be one of the single largest production quarters in our history.”

Kaufman acknowledged that positive results moving forward would be strongly assisted by a reduction in interest rates.

“If we see a meaningful, sustained reduction of five- and 10-year interest rates, it will be a positive capital catalyst for our business by driving increased origination volumes, and allowing us to move more loans off our balance sheet, which will increase our earnings run rate and position us well for 2026.”

Larry Getlen could be reached at lgetlen@commercialobserver.com.