Commercial mREITs Resume Coverage of CMTG, GPMT & RC

Research evidence excerpt

Commercial mREITs Resume Coverage of CMTG, GPMT & RC

AresCommercialCommercialmREITsReal Estate Corporation UBS Research

Investment Summary

We resume coverage of CMTG ($2.75 PT), GPMT ($1.50 PT), and RC ($2.00 PT), each

with a Neutral rating. These stocks currently trade at ~0.20x–0.25x book value, well

below the broader commercial mREIT average of ~0.60x. The steep discount stems from

high concentrations of problem assets, limited earnings visibility, and uncertainty

regarding ultimate book value.Unlike larger peers leveraging global scale and strong

liquidity to originate new loans—particularly in multifamily and industrial real estate,

CMTG, GPMT, and RC remain focused on asset resolution, deleveraging, and balance

sheet repair. CMTG is primarily a portfolio-resolution story with ~44% of loans on non-

accrual and concentrations in multifamily (~44%) and hospitality (~19%), GPMT is

increasingly a credit migration story, with ~50% office exposure and ~45% of loans

rated Risk 3 as maturities approach, and RC is a balance-sheet repositioning story

centered on CRE asset sales and SBA-driven earnings growth. While current valuations

appear to price in significant credit stress, we remain cautious until we see clearer signs

of stabilizing book value and sustainable earnings recovery.

FigureSource:UBS1: Estimates(1)Investment SummaryInvestment

Estimate Summary

In Figure 2, we present core EPS estimates and a pre-loss EPS view, isolating operating

earnings from realized losses. Reported estimates incorporate our assumptions for

realized losses and portfolio resolutions, resulting in significant EPS volatility in 2026,

followed by partial normalization in 2027 as credit costs moderate.

Our estimates are not directly comparable to consensus, which remains limited and