Sunrise Realty Trust and Southern Realty Trust Announce Successful Merger Completion

Sunrise Realty Trust and Southern Realty Trust Merger Completed

On November 5, 2026, Sunrise Realty Trust, Inc. (NASDAQ: SUNS) successfully completed its merger with Southern Realty Trust Inc. (SRT), a significant milestone for both firms in the commercial real estate lending sector. This union under the Tannenbaum Capital Group's umbrella aims to enhance the efficiency and scale of their operations, consolidating their resources into a singular entity that will continue to operate under the Sunrise Realty Trust name.

Overview of the Merger

With the merger, the consolidated entity boasts a book value of approximately $285 million, alongside total assets near $534 million. A pro forma analysis reveals that the new organization has a total of $604 million in loan commitments spread across 14 portfolio loans, primarily secured by assets located in strategic Southern U.S. markets. By merging the strengths of both companies, the new entity seeks improved operational efficiencies and simplified access to capital—a crucial need for any expanding leverage in the competitive domain of commercial real estate.

Leonard Tannenbaum, Executive Chairman, expressed enthusiasm regarding the merger, indicating that this landmark event is a transformational step in their role within the public markets. He remarked on the value generated through integrating two complementary portfolios built with a shared investment philosophy, thus enhancing stockholder wealth and the overall value proposition.

Post-Merger Structure and Benefits

Upon completion of the merger, each outstanding share of SRT was converted into 1.45 shares of SUNS common stock, supplemented with a cash component of $0.05 per share. Consequently, SUNS issued a total of 8,464,975 shares, which now leads to a total of 21,980,826 shares outstanding. This strategic consolidation results in former SRT shareholders holding around 38.5% of the combined entity's shares, while pre-merger SUNS shareholders continue to possess approximately 61.5%. Furthermore, certain SRT shareholders will not be allowed to sell their newly acquired SUNS shares for 120 days following the merger.

The merger agreement included a revised management agreement in which the incentive fee for SUNS' external manager decreased from 20% to 17.5%, with a hurdle rate modification from 8% to 7%. This change aligns the interests of management with shareholders, aiming to further enhance financial performance and returns.

Strategic Focus Moving Forward

Sunrise Realty Trust concentrates on providing flexible financing solutions to sponsors engaged in commercial real estate projects, focusing particularly on transitional properties that are likely to yield high value in the rapidly growing Southern U.S. markets. The merger allows for a more robust platform, enhancing the scale of operations while effectively lowering costs through improved efficiencies.

In addition to the structural changes, the SUNS Board of Directors has expanded, now including an independent director who was appointed by SRT, thus enhancing governance practices and ensuring diverse perspectives in decision-making.

Conclusion

The merger between Sunrise Realty Trust and Southern Realty Trust marks a pivotal moment as the new, combined company looks to dominate the commercial real estate lending space with a stronger, consolidated footing. Investors and stakeholders anticipate that this strategic move will generate attractive risk-adjusted returns, lay the groundwork for sustained growth, and enhance shareholder value well into the future. This merger not only strengthens the individual entities but also sets a precedent for potential collaborations in the commercial real estate industry.

For more information about Sunrise Realty Trust's services and future direction, visit www.sunriserealtytrust.com.