Arbor Realty Trust Faces Challenges Amid Strained Relationship Between Operating Segments

Arbor Realty Trust, a mortgage REIT, is down 40% since 2025 due to strained relationships between its two operating segments. The company's loan portfolio is concentrated on 2021 and 2022 vintages, which are underwritten at a peak market and have struggled to refinance due to lower valuations and higher borrowing costs. Arbor is working to restructure these loans and has taken over properties until new buyers can be found. The mREIT's double-digit yield may not be a bargain, as investors should consider the reasons behind the decline.