Sunrise Realty Trust, Inc. (NASDAQ: SUNS), a newly formed real estate investment trust (REIT), reported a net income of approximately $6.9 million for the fiscal year ending December 31, 2024, translating to earnings of $1.01 per basic weighted average share. This marks a significant increase from the previous period, where the company had minimal operational activity and reported a net income of $234,622. The company’s revenue primarily stemmed from interest income, which amounted to approximately $10.8 million, offset by interest expenses of $0.2 million. Operating expenses totaled around $3.7 million, largely driven by general administrative costs, professional fees, and management fees.
The company underwent a significant transformation in 2024, completing a spin-off from Advanced Flower Capital Inc. (AFC) on July 9, 2024. This strategic move allowed SUNS to operate independently, with total net assets of approximately $114.8 million at the time of the spin-off. Following the separation, SUNS has focused on originating and investing in secured commercial real estate loans, targeting a diversified portfolio that includes senior mortgage loans, mezzanine loans, and commercial mortgage-backed securities across various asset classes. As of December 31, 2024, the company held loans with a carrying value of approximately $130.7 million, with a weighted average remaining life of 2.6 years.
In terms of operational developments, SUNS has established a robust loan portfolio, with significant commitments made throughout the year. The company reported an aggregate of approximately $190.9 million in loan commitments, with outstanding principal of about $132.6 million. Notably, the company has engaged in various loan agreements, including a $96 million whole loan for a development project in Fort Lauderdale, Florida, and a $57 million senior secured loan for a luxury hotel in Austin, Texas. These investments are expected to generate substantial returns, with the company targeting a net internal rate of return in the low-teens, potentially increasing to the mid-teens with additional revenue from its portfolio.
Looking ahead, SUNS aims to leverage its position in the commercial real estate market, particularly in the Southern U.S., where it anticipates continued demand for its lending services. The company has a pipeline of approximately $1.4 billion in commercial real estate deal commitments under review, indicating a strong potential for future growth. However, the company acknowledges the inherent risks associated with its business model, including market volatility, interest rate fluctuations, and the potential for credit losses. As such, SUNS is committed to maintaining a disciplined investment strategy and robust risk management practices to navigate these challenges effectively.
About Sunrise Realty Trust, Inc.
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