Not all REITs are worth buying. I highlight three popular REITs to avoid. I then present a few better alternatives to buy.

Arbor Realty Trust was forced to cut its dividend to common shareholders by 30% following a dip in net interest income and EPS. The mREIT has seen delinquencies come in hotter in recent quarters and plans to take back non-performing assets as real estate owned. REO jumped 71% sequentially. The Series E Preferreds are now trading for 66 cents on the dollar with a 9.46% yield on cost.

ABR remains under pressure from high interest rates, worsening multifamily market conditions, and elevated leverage, threatening its core business model and book value. Loan modifications, rising REO inventory, and a potential multifamily glut signal persistent credit risk and limited refinancing options for Arbor's bridge loan portfolio. Dividend cuts and leverage reduction are prudent, but economic headwinds and oversupply in key markets suggest continued strain well beyond 2025.

I am downgrading Arbor Realty Trust (ABR) to HOLD due to a substantial dividend cut and weak Q1 2025 earnings. The dividend was slashed by almost 40%. I see the dividend cut as an indicator of strong headwinds, which are likely to persist or even worsen with rising delinquency rates.

Investors love dividend stocks, especially the ultra-high-yield variety because they offer a significant income stream and have massive total return potential.

Preferred stocks offer high yields and low appreciation, complementing common stocks and bonds in an income-focused portfolio. Arbor Realty's Series F preferred stock offers a fixed-to-floating yield, likely to be redeemed in October 2026, ensuring a strong total return. KKR Real Estate Finance's Series A preferred stock yields 8.7% at current prices, with well-covered dividends and significant upside potential.

The headline numbers for Arbor Realty Trust (ABR) give insight into how the company performed in the quarter ended March 2025, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.

Arbor Realty Trust, Inc. (NYSE:ABR ) Q1 2025 Earnings Conference Call May 2, 2025 10:00 AM ET Company Participants Paul Elenio - Chief Financial Officer Ivan Kaufman - President and CEO Conference Call Participants Steve Delaney - Citizens JMP Securities Jade Rahmani - KBW Rick Shane - J.P. Morgan Leon Cooperman - Omega Family Office Operator Please stand by, your program is about to begin.

Arbor Realty Trust (ABR) came out with quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.47 per share a year ago.

Company Highlights: GAAP net income of $0.16 per diluted common share Distributable earnings1 of $0.28, or $0.31 per diluted common share, excluding $7.1 million of realized losses from the sale of two real estate owned properties that were previously reserved Declares cash dividend on common stock of $0.30 per share Closed on a new $1.15 billion repurchase facility to unwind in full two CLO vehicles; enhancing leverage, reducing pricing and generated ~$80 million of additional liquidity Servicing portfolio of ~$33.48 billion, agency loan originations of $605.9 million Structured loan portfolio of ~$11.49 billion, originations of $747.1 million and runoff of $421.9 million Foreclosed on seven non-performing loans as real estate owned assets totaling $196.7 million UNIONDALE, N.Y., May 02, 2025 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), today announced financial results for the first quarter ended March 31, 2025.