Koch Real Estate Invests $32M In Ladder Capital; Street Is Cautiously Optimistic

Ladder Capital on Dec. 29 announced that an affiliate of Koch Real Estate Investments exercised its option to invest $32 million in its common equity, leading to the issue of 4 million shares. Shares of the real estate investment trust (REIT) rose 1.2% in pre-market trading on Wednesday.

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Koch entered into a strategic financing agreement with Ladder Capital (LADR) in April 2020, to secure $206.4 million in senior secured financing to fund transitional and land loans.

“We’re pleased to have a premier investor like Koch Real Estate Investments as a new long-term equity investor in Ladder,” said Ladder Capital CEO Brian Harris.

Last month, Wolfe Research analyst Matthew Howlett initiated coverage on LADR stock with a Sell rating and a price target of $7 (27% downside potential).

Howlett initiated the commercial mortgage finance sector with a Sell rating based on concerns around underlying property values, which could increase defaults.

Meanwhile, the analyst launched coverage of the mortgage finance sector with a Buy rating based as he expects increased consumer demand for housing amid low interest rates and Fed stimulus.

Overall, the rest of the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 2 Buys and 1 Sell. (See LADR stock analysis on TipRanks)

With shares down 46% year-to-date, the average price target stands at $9.50 and implies 1% downside potential to current levels.