ACRES Commercial Realty : Earnings Presentation Second Quarter 2023

Second Quarter 2023 Earnings Presentation

August 2, 2023

Disclaimer

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not historical facts but rather are based on ACRES Commercial Realty Corp.'s ("ACR's" or the "Company's") current beliefs, assumptions and expectations. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to ACR or are within its control. If a change occurs, its business, financial condition, liquidity and results of operations may vary materially from those expressed in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect ACR's view only as of the date of this presentation. ACR uses words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "estimate," "target," and variations of these words and similar expressions to identify forward-looking statements. Forward-looking statements are subject to various risks and uncertainties that could cause actual results to vary from its forward-looking statements, including, but not limited to:

• changes in the industry, interest rates, the debt securities markets, real estate markets or the general economy;
• increased rates of default and/or decreased recovery rates on its investments;
• the performance and financial condition of its borrowers;
• the cost and availability of its financings, which depend in part on its asset quality, the nature of its relationships with its lenders and other capital providers, its business prospects and outlook and general market conditions;
• the availability and attractiveness of terms of additional debt repurchases;
• availability, terms and deployment of short-term and long-term capital;
• availability of, and ability to retain, qualified personnel;
• changes in its business strategy;
• availability of investment opportunities in commercial real estate-related and commercial finance assets;
• the degree and nature of its competition;
• the resolution of its non-performing and sub-performing assets;
• the outbreak of widespread contagious disease, such as the novel coronavirus, COVID-19;
• the Company's ability to comply with financial covenants in its debt instruments;

• the adequacy of its cash reserves and working capital;
• the timing of cash flows, if any, from its investments;
• unanticipated increases in financial and other costs, including a rise in interest rates;
• our ability to maintain compliance with over-collateralization and interest coverage tests in our collateralized debt obligations ("CDOs") and/or collateralized loan obligations ("CLOs");
• its dependence on ACRES Capital, LLC, its "Manager", and ability to find a suitable replacement in a timely manner, or at all, if its Manager or the Company were to terminate the management agreement;
• environmental and/or safety requirements;
• its ability to satisfy complex rules in order for ACR to qualify as a real estate investment trust ("REIT"), for federal income tax purposes and qualify for its exemption under the Investment Company Act of 1940, as amended, and its ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules;
• legislative and regulatory changes (including changes to laws governing the taxation of REITs or the exemptions from registration as an investment company); and
• other factors discussed under Item IA. Risk Factors in its Annual Report on Form 10-K for the year ended December 31, 2022 and those factors that may be contained in any subsequent filing ACR makes with the Securities and Exchange Commission.

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Disclaimer (continued)

Forward-Looking Statements (continued)

In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur and actual results, performance or achievement could differ materially from those anticipated or implied in the forward-looking statements. The Company undertakes no obligation, and specifically disclaims any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Past Performance

Past performance is not indicative of future results. There is no guarantee that any investment strategy referenced herein will work under all market conditions. Prior to making any investment decision, you should evaluate your ability to invest for the long-term, especially during periods of downturns in the market. You alone assume the responsibility of evaluating the merits and risks associated with any potential investment or investment strategy referenced herein.

Notes on Presentation

This presentation contains information regarding financial results that is calculated and presented on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States ("GAAP"), which management believes is relevant to assessing ACR's financial performance. Please refer to page 20 for the reconciliation of Net income (Loss), a GAAP financial measure, to Earnings Available for Distribution ("EAD"), a non-GAAP financial measure.

Unless otherwise indicated, information included in this presentation is at or for the period ended June 30, 2023.

Definitions

Refer to page 25 for a description of certain terms not otherwise defined or footnoted, including EAD, Benchmark Rate, GAAP Book Value, and other key terms.

No Offer or Sale of Securities

This presentation is for informational purposes only and does not constitute an offer to sell or the solicitation of any offer to buy any securities of ACR or any other entity. Any offering of securities would be made pursuant to separate documentation and any such securities would not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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Highlights

• Manager is focused on delivering shareholder value through EAD (1) growth and share repurchases
• Earnings and capital gains can be retained through tax assets to increase book value

Percentage of

Multifamily-focused CRE

in Loan Portfolio

75%

2Q Net CRE Loan Payoffs

$10M

Per Share GAAP

Net Income / EAD

$0.10 / $0.60

CECL Reserve at

June 30, 2023

$25.7M

(1.30% of Loan

Portfolio)

Total Liquidity at

June 30, 2023

$91.2M

Stability in Book Value (2)

Year over Year

increase of

$0.02 to $24.50

1. Refer to page 20 for the reconciliation of Net Income (Loss), a GAAP financial measure, to EAD, a non-GAAP financial measure
2. Book value is down $0.01 per share from the previous quarter

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Second Quarter Results

Financial Results

• GAAP net income per share for Q2 2023: $0.10, and includes:
• • $(0.31) due to $2.7M provision for CECL reserves, primarily attributable to the expected negative impact of macroeconomic factors on the general economy, partially offset by improvements in general portfolio credit risk
• EAD (1) for Q2 2023: $0.60

Book Value

CRE Loan Activity & CRE

Portfolio

Capitalization & Liquidity

• GAAP book value: $24.50, down from $24.51 in the first quarter of 2023 and up from $24.48 in the second quarter of 2022
• Annual increase of 12.9% since ACRES acquisition in Q3 2020
• $2.0B CRE loan portfolio comprising 78 loans with a weighted average LTV of 74%
• $22.5M of CRE loan production and $47.3M of loan repayments
• 5% of CRE loan portfolio is rated 4 or 5
• 98% of the par value of the CRE loan portfolio is current on payments
• $161.9M of net investments in real estate and properties held for sale
• Non-recourse,non-mark-to-market CLO financings comprised 80% of asset-specific borrowings
• Total liquidity of $91.2M at June 30, 2023

(1) Refer to page 20 for the reconciliation of Net Income (Loss), a GAAP financial measure, to EAD, a non-GAAP financial measure

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