Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q1 2025 Earnings Presentation
23 slides from Ares Commercial Real Estate's earnings presentation, May 7, 2025
Slide 1: First Quarter 2025 Earnings Presentation
Exhibit 99.2 First Quarter 2025 Earnings Presentation
Slide 2: Disclaimer
Disclaimer Statements included herein may constitute “forward-looking statementsˮ within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, which may relate to future events or the future performance or financial co
Slide 3: 1Q 2025 Company Results and Highlights
1Q 2025 Company Results and Highlights • GAAP net income of $9 million or $0.17 per diluted common per share 1Q 2025 • Distributable Earnings of $7 million or $0.13 per diluted common per share(1) Financial • No realized losses during the quarter Results • Stable book value of $542 million or $9.88
Slide 4: Portfolio Overview
Portfolio Overview Portfolio Highlights 27 loans and two REO properties • Risk rated 1-3 loans (ex. office): Primarily collateralized by multifamily, industrial and self storage properties • Risk rated 1-3 office loans: Repayments led to a 14% decline in carrying value during the quarter • Risk rate
Slide 5: Ares Management is a Global Leader
Ares Management is a Global Leader With approximately $546 billion in assets under management, Ares Management Corporation is a global alternative investment manager operating an integrated platform across five business groups Global Footprint(3) Profile Founded 1997 AUM $546 billion Employees 4,140
Slide 6: Office Loans
Office Loans Office loans measured by outstanding principal balance decreased 9% QoQ and 25% YoY Reduced Office Loans YoY as Measured by Outstanding Principal Balance 1 ($ in millions) 2 3 4 Note: As of March 31, 2025 unless otherwise noted. Past performance is not indicative of future results. 6
Slide 7: Balance Sheet and Capital Position Provides Flexibility
Balance Sheet and Capital Position Provides Flexibility Successful in de-levering the balance sheet and maintaining higher levels of liquidity Reduction in Borrowings Repayments on Loans ($ in millions) Held for Investment 1 2 $307 million 3 in 1Q 2025 4 Available Capital(3) $147 million Note: Past
Slide 8: Trends in CECL Reserves
Trends in CECL Reserves Change in CECL Reserves 1Q 2025 ($ in millions) 4Q 2024 CECL Reversal of CECL Net Decrease in CECL 1Q 2025 CECL Reserve Reserves(1) Reserves(2) Reserve Note: As of March 31, 2025 unless otherwise noted. Past performance is not indicative of future results. Numbers may not sum
Slide 9: CECL Reserves
CECL Reserves CECL Reserves by CECL Reserves by Risk Rating Property Type $140 million Total CECL Reserves 9.9% CECL Reserves as a Percent of Loans Held for Investment(1) 93% 90% CECL reserves relates to office and residential / CECL reserves relates to risk rated 4 and 5 loans condo loans Note: As
Slide 10: CECL Reserves for Risk Rated 4 and 5 Loans
CECL Reserves for Risk Rated 4 and 5 Loans Risk Rated 4 and 5 Loans Risk Rated 4 and 5 Loans CECL Reserves by Property CECL Reserves as a Percent Type of Loan Balance(2) $130 million CECL Reserves for Risk Rated 4 and 5 Loans 35% CECL Reserves as a Percent of Risk Rated 4 and 5 Loan Balance(1) Note:
Slide 11: Summary of Real Estate Owned ("REO")
Summary of Real Estate Owned ("REO") Mixed-Use Office Quarter Converted to REO: 3Q 2023 3Q 2024 Location: Florida North Carolina Square Footage: 816 thousand 607 thousand Carrying Value:(1) $79 million $57 million Income Yield:(2) 9% 9% Note: As of March 31, 2025 unless otherwise noted. Past perform
Slide 12: Appendix
Appendix
Slide 13: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Office Loans: 1 Senior IL Nov 2020 $165.1 $165.1 $148.2 (
Slide 14: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Multifamily Loans: 10 Senior NY May 2022 $133.0 $132.2 $1
Slide 15: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Carrying Unleveraged Payment # Loan Type Location Date Commitment Principal Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Residential/Condominium Loans: 21 Senior NY Mar 2022 $129
Slide 16: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ in millions) Origination Current Loan Outstanding Unleveraged Payment # Loan Type Location Date Commitment Principal Carrying Value Interest Rate SOFR Floor Effective Yield Maturity Date Terms(1) Self Storage Loans: 25 Senior PA Mar 2022 $18.2 $18.2 $18
Slide 17: Consolidated Balance Sheets
Consolidated Balance Sheets As of ($ in thousands, except share and per share data) 3/31/2025 12/31/2024 ASSETS Cash and cash equivalents $ 125,496 $ 63,799 Restricted cash ($3,587 and $2,495 related to consolidated VIEs, respectively) 3,587 2,495 Loans held for investment ($182,370 and $551,955 rel
Slide 18: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 Revenue: Interest income $ 27,480 $ 33,492 $ 39,345 $ 40,847 $ 44,033 Interest expense (18,189) (22,282) (27,401) (27,483) (28,819) Ne
Slide 19: Reconciliation of Net Income (Loss) to Non-GAAP Distributable Earnings (Loss)
Reconciliation of Net Income (Loss) to Non-GAAP Distributable Earnings (Loss) For the Three Months Ended ($ in thousands, except per share data) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 Net income (loss) attributable to common stockholders $ 9,345 $ (10,664) $ (5,880) $ (6,125) $ (12,323)
Slide 20: Diverse Sources of Financing Supports Portfolio
Diverse Sources of Financing Supports Portfolio Diversified financing sources totaling $1.4 billion with $426 million of undrawn capacity(1,2) ($ in millions) Total Outstanding Non Spread Based Financing Sources Commitments Principal Pricing Range Mark to Credit Mark to Market Secured Funding Agreem
Slide 21: Glossary
Glossary Distributable Earnings (Loss) Distributable Earnings (Loss) is a non-GAAP financial measure that helps the Company evaluate its financial performance excluding the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative of its current loan origin
Slide 22: Endnotes
Endnotes 1Q 2025 Company Results and Highlights; page 3 Note: As of March 31, 2025 unless otherwise noted. Past performance is not indicative of future results. Due to rounding, numbers may not add up to the totals provided. 1. Distributable Earnings (Loss) and Distributable Earnings excluding reali
Slide 23: Ares Commercial Real Estate Corporation
QO ARES COMMERCIAL REAL ESTATE CORPORATION
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