Ladder Capital (LADR) risk factors, FY2025 10-K

Ladder Capital's FY2025 10-K, filed Feb 09, 2026, lists 80 risk factors in 7 groups. Against the prior year's 79: 16 new, 15 dropped, 18 substantially reworded.

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Risk factors listed
807 groups
New this year
16vs 79 last year
Dropped
15since the prior 10-K
Substantially reworded
18of those kept
Section length
31k wordsItem 1A

What the changes say

  • Achieved investment grade credit ratings, expanding capital markets relationships and impacting debt and strategic partnerships.

What changed since the prior 10-K

New

  • NewRisks Related to Our Operations

    Our success depends upon hiring and retaining qualified personnel, including senior management and loan originators, and the loss of key personnel could materially harm our business

    Competition for senior management and loan originators in commercial real estate finance may hinder talent retention and recruitment.

  • NewRisks Related to Our Operations

    difficulties; or (v) be unable or unwilling to fulfill their obligations, which may affect our financial conditions or results of operations

    Proprietary financial models and underwriting criteria may fail to accurately evaluate target assets in a highly competitive lending market.

  • NewRisks Related to Our Operations

    We cannot predict how government policies, Federal Reserve actions, or changes in the political environment will affect our business and the markets in which we operate

    Federal Reserve monetary policies, administrative changes, inflation, and tariffs create macroeconomic volatility affecting commercial real estate financing.

  • NewRisks Related to Our Operations

    Technology, e-commerce, and remote work have fundamentally changed commercial real estate demand patterns, and these shifts may have an adverse impact on the value of certain of our debt and equity investments

    E-commerce and hybrid work models have reduced demand for Class B and C office space while impacting retail property valuations.

  • NewRisks Related to Our Portfolio

    Inflation and increased operating costs have stressed and may continue to stress property performance and mortgage loan performance

    Persistent inflation and potential tariff policies increase operating expenses, stressing commercial property operations and mortgage loan performance.

  • NewRisks Related to Our Portfolio

    pledges can be expensive, lengthy and limited by the application of state, bankruptcy, insolvency and other debtor and tenant relief laws

    Distressed or non-performing loans require costly, lengthy restructuring or workout negotiations under applicable debtor and tenant relief laws.

  • NewRisks Related to Our Portfolio

    Operating and disposing of properties acquired through foreclosures subject us to additional risks that could harm our results of operations

    Operating and liquidating foreclosed properties subjects the company to environmental liabilities, capital expenditures, and potential recovery losses.

  • NewRisks Related to Our Portfolio

    Insurance on the real estate underlying our loans and investments may not be available or cover all losses, and this shortfall could result in both loss of cash flow from and a decrease in the asset value of the affected property

    Borrowers may lack adequate property insurance for catastrophic natural disasters, extreme weather, terrorism, or civil unrest.

  • NewRisks Related to Our Portfolio

    or impairment review, or our accumulated other comprehensive income/(loss) in our shareholders’ equity, in the case of available-for-sale securities that are subject only to temporary impairments

    Credit deterioration and impairment evaluations for loans, real estate, and CMBS securities rely on subjective internal models and third-party pricing.

  • NewRisks Related to Our Indebtedness

    As a holding company, we depend on distributions from our subsidiaries to meet our obligations, and our obligations are structurally subordinated to the liabilities of our subsidiaries

    Holding company structure makes debt obligations structurally subordinated to operating subsidiary liabilities, relying on subsidiary distributions.

  • NewRisks Related to Our Indebtedness

    arrangements. Certain of our debt agreements contain restrictions on distributions from subsidiaries above specified thresholds or in certain circumstances

    Subsidiary debt agreements restrict cash distributions to the holding company above specified thresholds.

  • NewRisks Related to Regulatory and Compliance Matters

    The evolving and often conflicting political and regulatory landscape surrounding sustainability and climate change creates significant uncertainty and compliance challenges that could adversely affect our business, operations, and financial condition

    Divergent state, federal, and local sustainability laws, alongside stayed SEC climate rules, create regulatory compliance uncertainty.

  • NewRisks Related to Our Taxation as a REIT

    the annual REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basis

  • NewRisks Related to Our Taxation as a REIT

    Certain of our subsidiaries have also elected to be taxed as REITs under the Code and are, therefore, subject to the same risks in the event that they fail to qualify as REITs in any taxable year. If any of these subsidiaries were to fail to qualify as a REIT, then we might also fail to qualify as a REIT

  • NewRisks Related to Our Taxation as a REIT

    Our business may be adversely affected if our reputation or the reputation of counterparties with whom we associate is harmed

  • NewRisks Related to Our Taxation as a REIT

    Our use of artificial intelligence technologies may produce inaccurate or biased results and presents regulatory, legal, and reputational risks

Dropped

  • DroppedRisks Related to Our Operations

    We may not be able to hire and retain qualified loan originators or grow and maintain our relationships with key loan brokers, and if we are unable to do so, our ability to implement our business and growth strategies could be limited

  • DroppedRisks Related to Our Operations

    We cannot predict the effect that government policies, laws, and interventions adopted in response to an inflationary environment or the impact of changes in the U.S. political environment, including as a result of the change in administration, on our business and the markets in which we operate

  • DroppedRisks Related to Our Operations

    Continuing defaults, delinquencies and losses would further decrease property values, thereby resulting in additional defaults by commercial mortgage borrowers, further credit constraints and further declines in property values

  • DroppedRisks Related to Our Operations

    Shifts in consumer patterns, remote work policies and advances in communication and information technology that affect the use of traditional retail, hotel and office space may have an adverse impact on the value of certain of our debt and equity investments

    Inability to hire loan originators or maintain broker relationships.

  • DroppedRisks Related to Our Portfolio

    Accordingly, advances made to such types of borrowers entail higher risks than advances made to companies who are able to access traditional credit sources

  • DroppedRisks Related to Our Portfolio

    Consumer demand, combined with tight labor markets, increased government spending, and supply chain imbalances have created inflationary pressure on the economy in recent years. Increased operating costs could stress property performance and thus mortgage loan performance

    Unpredictable government policies and interest rate hikes from inflation.

  • DroppedRisks Related to Our Portfolio

    Loan modifications or restructurings of non-performing loans may be unsuccessful. The process for collecting or foreclosing mortgage liens or equity pledges may be expensive, lengthy and limited by the application of state, bankruptcy, insolvency and other debtor and tenant relief laws

  • DroppedRisks Related to Our Portfolio

    There can be no assurance that our due diligence processes will uncover all relevant facts or that any investment will be successful

  • DroppedRisks Related to Our Portfolio

    The borrower, or we as property owner and/or originating lender, might not purchase enough or the proper types of insurance coverage to cover all losses

    Defaults and delinquencies decreasing property values and liquidity.

  • DroppedRisks Related to Regulatory and Compliance Matters

    Our subsidiary that operates as a captive insurance company is subject to insurance laws

    Consumer shifts and remote work affecting retail, hotel, and office space.

  • DroppedRisks Related to Regulatory and Compliance Matters

    Risks associated with climate change may adversely affect our business, financial results, and reputation

  • DroppedRisks Related to Regulatory and Compliance Matters

    Actual or perceived environmental, social and governance matters may cause us to incur additional costs or reputational harm or result in investors ceasing to allocate their capital to us, all of which could adversely affect our business and results of operations

  • DroppedRisks Related to Hedging

    time consuming, and our failure to comply with any of these laws and regulations could subject us to lawsuits or government actions and damage our reputation

  • DroppedRisks Related to Our Taxation as a REIT

    through a TRS or other taxable corporation, as is the case with our securitization business, although such income will be subject to tax in the hands of the corporation at regular corporate rates

    Risks from originating loans to borrowers with poor operating history.

  • DroppedRisks Related to Our Taxation as a REIT

    governments, financial markets, financial institutions, supply chain vendors, or other businesses have occurred in the past and may occur in the future and could disrupt our normal business operations

    Inflationary pressures from labor markets and supply chain imbalances.

Reworded

  • 93% rewrittenRisks Related to Our Operations

    Our earnings may decrease because of fluctuations in prevailing interest rates and credit spreads and associated borrowing costs

    Updated to reflect Federal Reserve rate cuts in 2024 and 2025 following prior rate hikes.

  • 87% rewrittenRisks Related to Our Indebtedness

    Any credit ratings assigned to debt securities we issue could be downgraded, which could have a material impact on our financial condition, liquidity and results of operations

    Added the achievement of investment grade credit ratings on unsecured corporate debt as a key milestone.

  • 82% rewrittenRisks Related to Our Operations

    We may not be able to maintain our strategic business alliances

    Integrated investment grade status as a driver for expanded capital markets relationships with bank counterparties.

  • 80% rewrittenRisks Related to Our Portfolio

    Some of our portfolio investments are recorded at fair value and there is uncertainty as to the value of these investments. Furthermore, our determinations of fair value may have a material impact on our financial condition and results of operations

    Trimmed references to CECL standards and impairment reviews regarding fair value determinations.

  • 79% rewrittenRisks Related to Our Portfolio

    The due diligence process that we undertake in regard to investment opportunities may not reveal all facts and risks that may be relevant in connection with an investment and if we incorrectly evaluate the risks of our investments, we may experience losses

    Expanded details on borrower incentives to misrepresent information and comprehensive sponsor track record analysis.

  • 73% rewrittenRisks Related to Our Operations

    Market Risks Related to Our Investments

    Updated market risks to incorporate geopolitical uncertainty, commercial real estate demand patterns, and prepayment rates.

  • 67% rewrittenRisks Related to Our Taxation as a REIT

    The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of structuring CMBS transactions, which would be treated as prohibited transactions for U.S. federal income tax purposes

    Added taxable REIT subsidiaries (TRS) exceptions regarding prohibited transaction taxes for securitization businesses.

  • 58% rewrittenRisks Related to Hedging

    A liquid secondary market may not exist for certain hedging instruments and they, therefore, may involve risks and costs that could result in material losses

    Added potential lawsuits, government actions, and reputational damage for failing to comply with derivative laws.

  • 52% rewrittenRisks Related to Our Taxation as a REIT

    If we fail to qualify as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders

  • 47% rewrittenRisks Related to Our Taxation as a REIT

    Changes to U.S. federal income tax laws could materially and adversely affect us and our shareholders

  • 35% rewrittenRisks Related to Our Portfolio

    Current and future venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on venture partners’ financial condition and liquidity and disputes between us and our venture partners

  • 33% rewrittenRisks Related to Our Portfolio

    Additional risks may be presented by the type and use of a particular commercial property, including land (which we do not generally expect to produce income), or specialized use as a nursing home or hospitality property

    Was: Additional risks may be presented by the type and use of a particular commercial property, including specialized use as a nursing home or hospitality property

  • 32% rewrittenRisks Related to Our Operations

    The value of our investments can be adversely affected by many factors that are beyond our control, including dislocations, illiquidity and volatility in the market for commercial real estate, commercial real estate finance and the broader financial markets

    Was: The value of our investments may be adversely affected by many factors that are beyond our control, including dislocations, illiquidity and volatility in the market for commercial real estate, commercial real estate finance and the broader financial markets

  • 30% rewrittenRisks Related to Our Operations

    The allocation of capital among our business segments varies, which may adversely affect our financial performance and liquidity

    Was: The allocation of capital among our business lines may vary, which may adversely affect our financial performance and liquidity

  • 27% rewrittenRisks Related to Our Taxation as a REIT

    Our taxable income is calculated differently than net income based on GAAP

  • 27% rewrittenRisks Related to Our Taxation as a REIT

    Accounting and tax rules for certain of our transactions are highly complex and involve significant judgment and assumptions. The accuracy of our financial statements may be materially affected if our estimates, including loan loss reserves, prove to be inaccurate

  • 25% rewrittenRisks Related to Our Taxation as a REIT

    Distributions payable by REITs do not qualify for the reduced tax rates available for some dividends

  • 21% rewrittenRisks Related to Our Taxation as a REIT

    Our ownership of, and relationship with, TRSs is limited, and a failure to comply with the limits would jeopardize our REIT qualification, and our transactions with our TRSs may result in the application of a 100% excise tax if such transactions are not conducted on arm’s-length terms

All 80 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Summary of Principal Risk Factors

Risks Related to Our Operations

  1. 02Market Risks Related to Our Investments73% rewritten
  2. 03The allocation of capital among our business segments varies, which may adversely affect our financial performance and liquidity30% rewritten
  3. 04Our success depends upon hiring and retaining qualified personnel, including senior management and loan originators, and the loss of key personnel could materially harm our businessNew
  4. 05We may not be able to maintain our strategic business alliances82% rewritten
  5. 06difficulties; or (v) be unable or unwilling to fulfill their obligations, which may affect our financial conditions or results of operationsNew
  6. 07We cannot predict how government policies, Federal Reserve actions, or changes in the political environment will affect our business and the markets in which we operateNew
  7. 08We have a concentration of investments in the real estate sector and may have further concentrations from time to time in certain property types, locations, tenants and borrowers, which increases our exposure to the risks of certain economic downturns
  8. 09The value of our investments can be adversely affected by many factors that are beyond our control, including dislocations, illiquidity and volatility in the market for commercial real estate, commercial real estate finance and the broader financial markets32% rewritten
  9. 10Technology, e-commerce, and remote work have fundamentally changed commercial real estate demand patterns, and these shifts may have an adverse impact on the value of certain of our debt and equity investmentsNew
  10. 11Our earnings may decrease because of fluctuations in prevailing interest rates and credit spreads and associated borrowing costs93% rewritten
  11. 12Prepayment rates on mortgage loans cannot be predicted with certainty and prepayments may result in losses to the value of our assets

Risks Related to Our Portfolio

  1. 13Additional risks may be presented by the type and use of a particular commercial property, including land (which we do not generally expect to produce income), or specialized use as a nursing home or hospitality property33% rewritten
  2. 14Inflation and increased operating costs have stressed and may continue to stress property performance and mortgage loan performanceNew
  3. 15pledges can be expensive, lengthy and limited by the application of state, bankruptcy, insolvency and other debtor and tenant relief lawsNew
  4. 16Operating and disposing of properties acquired through foreclosures subject us to additional risks that could harm our results of operationsNew
  5. 17The due diligence process that we undertake in regard to investment opportunities may not reveal all facts and risks that may be relevant in connection with an investment and if we incorrectly evaluate the risks of our investments, we may experience losses79% rewritten
  6. 18Insurance on the real estate underlying our loans and investments may not be available or cover all losses, and this shortfall could result in both loss of cash flow from and a decrease in the asset value of the affected propertyNew
  7. 19Provisions for loan losses are difficult to estimate. Our reserves for loan losses may prove inadequate, which could have a material adverse effect on us
  8. 20Certain balance sheet investments are more illiquid and involve a greater risk of loss
  9. 21Our investments in subordinate loans, subordinate participation interests in loans, preferred equity and subordinate and/or unrated securities rank junior to other senior debt and we may be unable to recover our investment in these interests
  10. 22Our participation in the market for mortgage loan securitizations exposes us to risks that could result in losses to us
  11. 23Our access to the CMBS securitization market and the timing of our securitization and real estate sale activities causes our quarterly financial results to fluctuate
  12. 24We are subject to risks associated with unfunded conditional loan commitments or other future advances, such as declining real estate values and operating performance
  13. 25If we purchase or originate loans secured by liens on facilities that are subject to a ground lease and such ground lease is terminated unexpectedly, our interests could be adversely affected
  14. 26We have acquired and, in the future, may acquire net leased real estate assets, or make loans to owners of net leased real estate assets (including ourselves), which carry particular risks of loss that may have a material impact on our financial condition, liquidity and results of operations
  15. 27The leases at the properties underlying commercial real estate loans, securities or properties held by us may not be relet or renewed on favorable terms, or at all, which may result in a reduction in our net income, and as a result we may be required to reduce or eliminate cash distributions to shareholders
  16. 28Current and future venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on venture partners’ financial condition and liquidity and disputes between us and our venture partners35% rewritten
  17. 29Our investments in CMBS and other real estate-related securities are generally subject to losses
  18. 30Any credit ratings assigned to our investments could be downgraded, which could have a material impact on our financial condition, liquidity and results of operations
  19. 31Some of our portfolio investments are recorded at fair value and there is uncertainty as to the value of these investments. Furthermore, our determinations of fair value may have a material impact on our financial condition and results of operations80% rewritten
  20. 32or impairment review, or our accumulated other comprehensive income/(loss) in our shareholders’ equity, in the case of available-for-sale securities that are subject only to temporary impairmentsNew

Risks Related to Our Indebtedness

  1. 33Our business is leveraged, which could lead to greater losses than if we were not as leveraged
  2. 34The repurchase agreements that we use to finance our investments may require us to provide additional collateral, which could reduce our liquidity and harm our financial condition
  3. 35We are dependent upon our ability to access capital at rates and on terms we determine to be attractive. If our ability to access capital becomes constrained, our interest costs could increase, which could have material adverse effect on our results of operations, financial condition and cash flows
  4. 36Additionally, if we are unable to securitize our loans, replenish a warehouse line of credit, enter into or meet the managed reinvestment requirements of CLO transactions, we may be required to seek other forms of potentially less attractive financing or otherwise to liquidate our assets
  5. 37Any credit ratings assigned to debt securities we issue could be downgraded, which could have a material impact on our financial condition, liquidity and results of operations87% rewritten
  6. 38As a holding company, we depend on distributions from our subsidiaries to meet our obligations, and our obligations are structurally subordinated to the liabilities of our subsidiariesNew
  7. 39arrangements. Certain of our debt agreements contain restrictions on distributions from subsidiaries above specified thresholds or in certain circumstancesNew
  8. 40Our use of leverage may create a mismatch between the duration of financing and the life of the investments made using the proceeds of such financing, as well as between the index of our investments and the index of our leverage
  9. 41We are subject to counterparty risk associated with our debt obligations and cash balances
  10. 42As a result of the requirements of the risk retention rules, if we purchase a horizontal subordinate strip of a CLO to satisfy the risk retention rules, we would not be able to dispose of those subordinate interests during the required risk retention period, which may increase our risk of loss

Risks Related to Regulatory and Compliance Matters

  1. 43If our subsidiary that is regulated as a registered investment adviser is unable to meet the requirements of the SEC or fails to comply with certain U.S. federal and state securities laws and regulations, it will face termination of its investment adviser registration, fines or other disciplinary action
  2. 44Certain of our entities have in the past and may in the future make loans to other of our entities on other-than-arms’-length terms
  3. 45We intend to conduct our operations so that neither we nor any of our subsidiaries (including any series thereof) are required to register as an investment company under the Investment Company Act
  4. 46The evolving and often conflicting political and regulatory landscape surrounding sustainability and climate change creates significant uncertainty and compliance challenges that could adversely affect our business, operations, and financial conditionNew

Risks Related to Hedging

  1. 47We may choose to hedge our risks or not, and both choices could expose us to potential losses
  2. 48In addition, we may fail to recalculate, readjust and execute hedges in an efficient manner. We may also decide not to engage in one or more hedging transactions or refrain from using hedging to mitigate some or all of a specific risk, potentially resulting in losses
  3. 49A liquid secondary market may not exist for certain hedging instruments and they, therefore, may involve risks and costs that could result in material losses58% rewritten
  4. 50We may enter into hedging transactions that are subject to mandatory clearing and/or margin requirements
  5. 51Our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time and our failure to comply with any of these obligations could adversely affect our business, financial condition, results of operations, and our ability to make distributions to our shareholders

Risks Related to Our Class A Common Stock

  1. 52The market price and trading volume of our Class A common stock can be volatile, which could result in rapid and substantial losses for our shareholders
  2. 53Our charter contains REIT-related restrictions on the ownership of, and ability to transfer, our Class A common stock
  3. 54Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control

Risks Related to Our Taxation as a REIT

  1. 55If we fail to qualify as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our shareholders52% rewritten
  2. 56the annual REIT income and quarterly asset requirements also depends upon our ability to successfully manage the composition of our income and assets on an ongoing basisNew
  3. 57Certain of our subsidiaries have also elected to be taxed as REITs under the Code and are, therefore, subject to the same risks in the event that they fail to qualify as REITs in any taxable year. If any of these subsidiaries were to fail to qualify as a REIT, then we might also fail to qualify as a REITNew
  4. 58Our ownership of, and relationship with, TRSs is limited, and a failure to comply with the limits would jeopardize our REIT qualification, and our transactions with our TRSs may result in the application of a 100% excise tax if such transactions are not conducted on arm’s-length terms21% rewritten
  5. 59Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or exemption from registration under the Investment Company Act
  6. 60The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT
  7. 61REIT distribution requirements could adversely affect our ability to execute our business plan
  8. 62Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flow
  9. 63Complying with REIT requirements may cause us to forgo attractive opportunities or liquidate attractive investments
  10. 64The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of structuring CMBS transactions, which would be treated as prohibited transactions for U.S. federal income tax purposes67% rewritten
  11. 65The “taxable mortgage pool” rules may increase the taxes that we or our shareholders may incur and may limit the manner in which we effect future securitizations
  12. 66We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them
  13. 67We have not established a minimum distribution payment level and we cannot assure you of our ability to pay distributions in the future
  14. 68If we were to make a taxable distribution of shares of our Class A common stock, shareholders may be required to sell such shares or sell other assets owned by them in order to pay any tax imposed on such distribution
  15. 69Distributions payable by REITs do not qualify for the reduced tax rates available for some dividends25% rewritten
  16. 70Distributions to tax-exempt investors may be classified as unrelated business taxable income
  17. 71Our taxable income is calculated differently than net income based on GAAP27% rewritten
  18. 72Changes to U.S. federal income tax laws could materially and adversely affect us and our shareholders47% rewritten
  19. 73Our business model may not be successful. We may change our investment strategy, asset allocation and financing policy in the future without shareholder consent and any such changes may not be successful
  20. 74Our business may be adversely affected if our reputation or the reputation of counterparties with whom we associate is harmedNew
  21. 75If we fail to maintain an effective system of integrated internal controls, we may not be able to accurately and timely report our financial results
  22. 76We depend on our ability to produce accurate and timely financial statements in order to run our business. If we fail to do so, our business could be negatively affected, and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements
  23. 77Accounting and tax rules for certain of our transactions are highly complex and involve significant judgment and assumptions. The accuracy of our financial statements may be materially affected if our estimates, including loan loss reserves, prove to be inaccurate27% rewritten
  24. 78Our use of artificial intelligence technologies may produce inaccurate or biased results and presents regulatory, legal, and reputational risksNew
  25. 79Litigation may adversely affect our business, financial condition and results of operations
  26. 80We may face difficulties in obtaining and maintaining required authorizations or licenses to do business

Other Ladder Capital 10-Ks

  • FY2024 10-K risk factors
    79 risks

    Ladder Capital Corp's risk profile is dominated by commercial real estate loan concentrations, heavy debt leverage, and market volatility affecting property values. Fluctuating interest rates and inflation risks heavily impact asset performance and borrowing costs across business lines.

    Filed Feb 10, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.