EPCM Trims Preferred Stake in ACRES Commercial Realty, Shifting Focus to Common Stock Ahead of Potential Growth Push

Eagle Point Credit Management’s Recent Sale Signals a Strategic Realignment

Eagle Point Credit Management LLC (EPCM) sold 273 shares of ACRES Commercial Realty Corp.’s 7.875 % Series D preferred stock on February 17, 2026, at $22.20 per share—just shy of the current market price of $18.69. The transaction follows a steady stream of divestitures that began in early January and accelerated through mid‑February. The cumulative effect of these sales has reduced EPCM’s preferred‑stock stake from a peak of roughly 1.18 million shares to a residual 745,819 shares, while its common‑stock holdings remain unchanged at 1,177,060 shares. The timing of the sales, coupled with a modest market rally, suggests EPCM is re‑balancing its portfolio rather than reacting to a fundamental shock in ACRES’s operations.

Implications for Investors and the Company’s Outlook

EPCM’s consistent selling cadence reflects a broader trend among institutional holders of ACRES’s preferred securities, which are known for their higher yields and priority in dividend distribution. By trimming its preferred‑stock position while maintaining a significant common‑stock block, EPCM is potentially shifting its exposure from fixed‑income to equity upside. For investors, this move could be interpreted in two ways:

1. Confidence in Growth: EPCM may believe that ACRES’s underlying real‑estate assets—primarily income‑generating commercial properties—are poised for appreciation, making common shares a more attractive long‑term play.

2. Liquidity Needs: The firm could be liquidating preferred holdings to free capital for other investment opportunities, perhaps in sectors with higher risk‑return profiles.

Either scenario reduces the weight of preferred‑stock holders in the capital structure, potentially altering dividend dynamics. If a sizeable portion of preferred shareholders exit, the company may find it easier to allocate excess cash toward growth initiatives or debt reduction, which could benefit long‑term shareholders.

EPCM: A Pattern of Opportunistic Preferred‑Stock Trading

A review of EPCM’s filing history from December 2025 through February 2026 reveals a disciplined, volume‑based selling strategy. The firm routinely disposes of thousands of shares in a single transaction, often at prices close to prevailing market levels. For example, on January 13, 2026, EPCM sold 13,979 shares of the 8.625 % Series C preferred stock at $24.93 per share, while on January 30 it sold 2,868 shares of the same class at $25.09. These moves suggest EPCM is capitalizing on short‑term price differentials rather than engaging in long‑term speculation.

EPCM’s holdings also show a preference for the 7.875 % and 8.625 % preferred series, indicating a focus on higher‑yield instruments. The consistent divestiture pattern implies a systematic approach, potentially driven by internal risk‑management policies or portfolio rebalancing mandates. Investors should note that EPCM’s activity is likely to continue as long as the preferred stock remains attractive relative to market rates and the firm’s own liquidity needs.

What This Means for ACRES and Its Shareholders

From ACRES’s perspective, the incremental reduction in EPCM’s preferred‑stock stake does not materially affect the company’s governance or capital structure in the short term. However, a sustained outflow of preferred shareholders could:

• Lower Dividend Pressure: Fewer preferred holders mean the company may have greater flexibility in setting dividend payout ratios for common stockholders.

• Signal Management Confidence: The willingness of a large institutional investor to sell preferred shares at prices near or above the market suggests confidence in the company’s creditworthiness and asset performance.

• Attract New Investors: As preferred holdings dwindle, the company could appeal to investors seeking higher equity exposure, potentially tightening the share price and improving liquidity.

Overall, the current transaction appears to be part of EPCM’s routine portfolio management rather than a red flag for ACRES. Shareholders should monitor subsequent filings to assess whether the selling trend continues and whether it correlates with any shifts in the company’s strategic direction or dividend policy.