Ares Commercial Real Estate Corporation · NYSE:ACRE
Ares Commercial Real Estate — Q4 2024 Earnings Presentation
24 slides from Ares Commercial Real Estate's earnings presentation, Feb 12, 2025
Slide 1: Fourth Quarter and Full Year 2024 Earnings Presentation
Exhibit 99.2 Fourth Quarter and Full Year 2024 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: 4Q 2024 and Full Year 2024 Company Results and Highlights
4Q 2024 and Full Year 2024 Company Results and Highlights • 4Q 2024 and FY 2024 GAAP EPS (loss) of $(0.20) and $(0.64), respectively • 4Q 2024 and FY 2024 Distributable EPS (loss) of $(0.15) and $(0.82), respectively(1) Earnings and • 4Q 2024 and FY 2024 Distributable EPS of $0.18 and $0.75 excludin
Slide 4: Ares Management
Ares Management With approximately $484 billion in assets under management, Ares Management Corporation is a global alternative investment manager operating an integrated platform across five business groups Global Footprint(2) Profile Founded 1997 AUM $484 billion Employees 3,200+ Investment Profes
Slide 5: Ares Real Estate
Ares Real Estate Global real estate investment manager with vertically integrated operating platform that seeks to generate compelling risk-adjusted performance through market cycles $58 billion 295+ Core/Core-Plus Value-Add Opportunistic Real Estate Investment AUM Professionals Global Debt North Am
Slide 6: Portfolio Overview
Portfolio Overview Progress in identifying and addressing our risk rated 4 and 5 loans Risk Rated 1-3 Loan Portfolio Risk Rated 4 and 5 Loan Portfolio $1.3 $0.4 billion 31 billion 5 Portfolio Loans Portfolio Loans Size(2) Size(3) Majority Collateralized by Multifamily, Total Portfolio (1) 96% is Col
Slide 7: Risk Rated 4 and 5 Loans Progress in 2024
Risk Rated 4 and 5 Loans Progress in 2024 Total outstanding principal balance of risk rated 4 and 5 loans decreased 34% since YE 2023 Reduced Risk Rated 4 and 5 Loans YoY as Measured by Outstanding Principal Balance 1 ($ in millions) 2 3 4 Note: As of December 31, 2024 unless otherwise noted. Past p
Slide 8: Balance Sheet and Capital Position Provides Flexibility
Balance Sheet and Capital Position Provides Flexibility Focused on further de-levering the balance sheet and maintaining higher levels of available liquidity to support positive outcomes on risk rated 4 and 5 loans Reduction in Financial Leverage Repayments on Loans ($ in millions) Held for Investme
Slide 9: Trends in CECL Reserves
Trends in CECL Reserves Change in CECL Reserves FY 2024 Change in CECL Reserves 4Q 2024 ($ in millions) ($ in millions) Note: As of December 31, 2024 unless otherwise noted. Past performance is not indicative of future results. Numbers may not sum due to rounding. 1. The reversal of CECL reserves re
Slide 10: CECL Reserves
CECL Reserves CECL Reserves by CECL Reserves by Risk Rating (1) Property Type (1) $145 million Total CECL Reserves 8.5% CECL Reserves as a Percent of Loans Held for Investment (1) 91% 90% CECL reserves related to office and residential / CECL reserves related to risk rated 4 and 5 loans condo loans
Slide 11: 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) $132 million CECL Reserves for Risk Rated 4 and 5 Loans 37% CECL Reserves as a Percent of Risk Rated 4 and 5 Loan Balance(1) Note:
Slide 12: 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: 816 607 Carrying Value:(1) $80 $59 Income Yield:(2) 9% 8% Note: As of December 31, 2024 unless otherwise noted. Past performance may not be indicative of f
Slide 13: Appendix
Appendix
Slide 14: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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) Office Loans: 1 Senior IL Nov 2020 $163.8 $163.8 $150.1 (
Slide 15: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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) Multifamily Loans: 11 Senior NY May 2022 $133.0 $132.2 $1
Slide 16: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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: 25 Senior NY Mar 2022 $119
Slide 17: Loans Held for Investment Portfolio Details
Loans Held for Investment Portfolio Details ($ 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: 31 Senior PA Mar 2022 $18.2 $18.2 $18
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets As of ($ in thousands, except share and per share data) 12/31/2024 12/31/2023 ASSETS Cash and cash equivalents $ 63,799 $ 110,459 Restricted cash ($2,495 related to consolidated VIEs as of December 31, 2024) 2,495 — Loans held for investment ($551,955 and $892,166 related
Slide 19: Consolidated Statements of Operations
Consolidated Statements of Operations For the Three Months Ended ($ in thousands, except share and per share data) 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Revenue: Interest income $ 33,492 $ 39,345 $ 40,847 $ 44,033 $ 44,348 Interest expense (22,282) (27,401) (27,483) (28,819) (29,957) N
Slide 20: 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) 12/31/2024 9/30/2024 6/30/2024 3/31/2024 12/31/2023 Net income (loss) attributable to common stockholders $ (10,664) $ (5,880) $ (6,125) $ (12,323) $ (39,4
Slide 21: Diverse Sources of Financing Supports Portfolio
Diverse Sources of Financing Supports Portfolio Diversified financing sources totaling $1.7 billion with $512 million of undrawn capacity(1,2) ($ in millions) Total Outstanding Non Spread Based Financing Sources Commitments Principal Pricing Range Mark to Credit Mark to Market Secured Funding Agreem
Slide 22: 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 23: Endnotes
Endnotes 4Q 2024 and Full Year 2024 Company Results and Highlights Note: As of December 31, 2024 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 e
Slide 24: Ares Commercial Real Estate Corporation
QO ARES COMMERCIAL REAL ESTATE CORPORATION
Ares Commercial Real Estate — Q4 2024 Earnings Presentation on 6ix