Raymond James downgrades Arbor Realty (ABR) to a HoldWe are updating our estimates and downgrading our rating on Arbor Realty Trust (ABR) to Market Perform (from Outperform) after reviewing the 4Q results and Form 10-Q. The increase in interest rates and the higher-for-longer rate outlook has created headwinds for ABR’s business, such as 1) the need for additional loan modifications to manage through problem loans, 2) lower new originations, 3) lower agency volumes, and 4) increasing REO activity, which will be a drag on earnings over the next 12-24 months. Given these headwinds, we are reducing our estimates and expect the dividend to be reduced to $0.28/share in 1Q. We expect distributable earnings to trough in 1H25, with distributable earnings ex losses to begin recovering in 2H25 as resolutions occur and new investment activity increases.