Apollo Commercial Real Estate Finance (ARI) Status update summary

Transaction overview

• Entered a definitive agreement to sell the entire $9 billion commercial real estate loan portfolio to Athene for 99.7% of total loan commitments, net of CECL reserves, excluding two loans expected to be repaid before closing.

• Post-transaction, expects approximately $1.4 billion in net cash and a book value per share of about $12.05.

• Retains all net equity interests in real estate properties, valued at $466 million as of September 30, 2025.

• Transaction approved by the board and a special committee of independent directors; subject to majority stockholder approval.

• Includes a 25-day go-shop period to solicit additional offers before finalizing.

Rationale and strategic implications

• Sale addresses persistent undervaluation, with shares trading at an average of 0.76–0.77 times book value over the past four years.

• Purchase price represents a ~23% premium to recent trading levels and validates book value.

• Monetizing the portfolio in a single sale eliminates future asset-level execution risk and provides immediate liquidity.

• Intends to maintain REIT status and continue quarterly dividends, targeting an 8% annualized yield post-transaction.

• Management will evaluate new commercial real estate strategies and M&A opportunities, leveraging Apollo’s platform.

Future strategy and management alignment

• If no new strategy is identified by year-end, will consider all alternatives, including dissolution.

• Apollo will reduce its management fee by 50% and take payment in shares during the evaluation period.

• Apollo to reimburse up to $10 million in transaction expenses.

• Strategic review will consider both internal and external opportunities, including hybrid and equity strategies.

• Ongoing evaluation of REO assets for value creation, including lease-up, value-add, and development initiatives.