| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 36.75 | 235 |
| Intrinsic value (DCF) | 85.99 | 684 |
| Graham-Dodd Method | 2.47 | -77 |
| Graham Formula | 81.22 | 640 |
Ladder Capital Corp (NYSE: LADR) is a leading commercial real estate finance company structured as a real estate investment trust (REIT). Founded in 2008 and headquartered in New York, Ladder Capital specializes in originating and investing in a diversified portfolio of commercial real estate loans, securities, and properties. The company operates through three core segments: Loans, Securities, and Real Estate. Its loan portfolio includes first mortgage loans, mezzanine debt, and structured finance products, primarily secured by transitional or cash-flowing commercial properties. The Securities segment invests in commercial mortgage-backed securities (CMBS), U.S. Agency Securities, and corporate bonds, while the Real Estate segment owns a mix of commercial and residential properties, including office buildings, hotels, and student housing. As a REIT, Ladder Capital benefits from tax advantages by distributing at least 90% of taxable income to shareholders. With a market cap of approximately $1.32 billion, LADR is a key player in the mortgage REIT sector, offering investors exposure to commercial real estate debt and equity markets.
Ladder Capital Corp presents a compelling investment case for income-focused investors, given its diversified commercial real estate portfolio and REIT structure. The company's $0.92 annual dividend per share translates to an attractive yield, supported by stable cash flows from its loan and securities segments. However, risks include exposure to interest rate volatility (beta of 1.06) and potential credit risks in its transitional property loans. The company's strong liquidity position ($1.32 billion in cash) and disciplined underwriting mitigate some risks, but its high leverage (total debt of $3.07 billion) warrants caution. Investors should weigh LADR's yield against macroeconomic factors affecting commercial real estate, such as rising rates and office sector headwinds.
Ladder Capital differentiates itself through a hybrid business model combining commercial real estate lending, securities investing, and direct property ownership. This diversification provides multiple revenue streams, reducing reliance on any single market segment. The company's focus on transitional properties (e.g., lease-up or renovation projects) allows for higher yields compared to stabilized asset lenders, though with greater risk. LADR's underwriting expertise in complex financings gives it an edge in originating structured loans that larger banks may avoid. Compared to pure-play mortgage REITs, Ladder's direct real estate ownership provides downside protection through equity upside and depreciation benefits. However, its smaller scale ($1.3B market cap) limits pricing power versus giants like Starwood Property Trust. The company's securities portfolio is conservatively positioned with CMBS and Agency securities, unlike some peers taking on risker non-Agency exposure. Ladder's New York headquarters provides proximity to major real estate markets but may concentrate geographic risk. The REIT's ability to pivot between lending and investing based on market conditions is a key advantage in volatile rate environments.