Sunrise Realty Trust Files Merger Proxy Seeking Approval for Southern Realty Deal

What happened

Sunrise Realty Trust, Inc. (Nasdaq: SUNS) filed a definitive proxy statement on September 18, 2026, asking its stockholders to approve the issuance of approximately 8,464,955 shares of SUNS common stock in connection with a proposed merger with Southern Realty Trust Inc., according to the filing.

The filing states the merger would be carried out under an Agreement and Plan of Merger dated August 5, 2026, among SUNS, Southern Realty Trust, Sunrise Merger Sub, LLC, and Sunrise Manager LLC. Under the deal, Southern Realty Trust would merge into Sunrise Merger Sub, which would survive as a wholly owned subsidiary of SUNS.

Each outstanding share of Southern Realty Trust common stock would convert into 1.45 newly issued SUNS shares plus $0.05 in cash per share, payable by SUNS Manager as additional consideration, the filing states.

The filing states that existing SUNS stockholders are expected to own about 61% of the combined company and former Southern Realty Trust stockholders about 39%, with the combined company continuing to operate as Sunrise Realty Trust, Inc. and to trade on Nasdaq under the symbol SUNS.

SUNS shares closed at $7.31 on the event date, down 2.53% from the previous close of $7.50, according to price data.

The vote

A special meeting of stockholders is scheduled for Friday, October 23, 2026, at 9:30 a.m. Eastern Time, to be held virtually. Stockholders of record as of the close of business on September 10, 2026, are entitled to vote, according to the filing.

Stockholders are being asked to approve two proposals: the stock issuance, and a proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies.

The filing states the board of directors, acting on the unanimous recommendation of a special committee of independent and disinterested directors, unanimously recommends a vote "FOR" the stock issuance. Approval of the stock issuance is a condition to completing the merger, the filing states.

The proxy states that under Nasdaq Rules 5635(a)(1) and 5635(a)(2), the issuance of the shares requires stockholder approval.

How the companies describe the deal

The filing states that the merger is intended to combine two complementary commercial real estate lending portfolios managed under a common investment philosophy and team, and to create a larger publicly traded commercial mortgage real estate investment trust.

Among the benefits cited in the filing are consolidating existing co-investments into a larger public company, a higher public market profile through broader index inclusion and improved trading liquidity, increased margin with a reduced cost structure, and better access to more efficient capital.

The filing states that following the merger, the combined company will continue to be externally managed by SUNS Manager, and Brian Sedrish is expected to continue as chief executive officer.

The proxy states that SUNS and Southern Realty Trust currently expect the merger to be completed during the fourth quarter of 2026, subject to satisfaction or waiver of the conditions in the merger agreement. The filing notes that neither the SEC nor any state securities regulator has approved or disapproved the securities to be issued in the merger.

What this means

A DEFM14A is a definitive proxy statement filed with the SEC under Section 14(a) of the Securities Exchange Act of 1934. A preliminary version (PRE 14A) is filed first and is subject to SEC comments; the "DEF" designation means the document is definitive and, per the filing, was first mailed to stockholders on or about September 23, 2026. It is the document a public company must send to shareholders before a meeting at which they will be asked to vote on something.

Here, the item being voted on is not the merger itself but the issuance of shares to pay for it. SUNS is the acquirer, and it is paying partly in stock. Because SUS would have to create new shares and hand them to Southern Realty Trust holders, Nasdaq rules require the company to obtain stockholder approval before the shares can be issued.

The consideration is a combination of stock and cash. Each Southern Realty Trust share converts into 1.45 SUNS shares plus $0.05 in cash, with the cash portion funded by SUNS Manager rather than by SUNS itself. When a deal is structured as an exchange of shares, the shareholder is effectively trading one company's equity for a stake in the combined business.

A commercial mortgage REIT like SUNS lends money against commercial real estate, generally funded by a mix of borrowings and equity, rather than owning buildings directly. Combining two such portfolios under one externally managed platform is how the filing describes the strategic rationale for the combination.

The filing contains a Risk Factors section and states that the merger requires both SUNS stockholder approval and Southern Realty Trust stockholder approval, along with other closing conditions. It does not provide a date for completion beyond the stated fourth-quarter 2026 expectation.