ACRE Files 2024 10-K: Real Estate Investment Performance Detailed

TL;DR

ACRE's 2024 10-K is in, detailing their CRE loan and investment performance for the year.

AI Summary

Ares Commercial Real Estate Corp. (ACRE) filed its 2024 10-K on February 12, 2025, reporting its financial performance for the fiscal year ending December 31, 2024. The filing details the company's real estate investment trust operations, including its loan and investment segments. Key financial data and operational highlights for the year are presented within this comprehensive annual report.

Why It Matters

This filing provides investors with a detailed look at Ares Commercial Real Estate Corp.'s financial health and strategic positioning in the real estate market for the past fiscal year.

Risk Assessment

Risk Level: medium — As a real estate investment trust, ACRE is subject to market fluctuations and interest rate risks inherent in the commercial real estate sector.

Key Numbers

• 2024-12-31 — Fiscal Year End (The end date for the financial reporting period covered by the 10-K.)
• 2023-12-31 — Prior Year End (Comparison point for financial performance.)
• 2022-12-31 — Previous Year End (Further comparison for financial performance trends.)

Key Players & Entities

• Ares Commercial Real Estate Corp. (company) — Filer of the 10-K
• 2024-12-31 (date) — End of the reporting period
• 2025-02-12 (date) — Filing date of the 10-K
• 212.515.3400 (phone_number) — Business phone number

FAQ

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value per share ACRE New York Stock
• $6.65 — ed on the closing price on that date of $6.65 on the New York Stock Exchange, was app
• $130.0 million — them. As of December 31, 2024, we had $130.0 million outstanding under our $130.0 million Cr
• $718.5 million — ance under the Financing Agreements was $718.5 million. See Item 7, "Management's Discussion
• $456.0 million — Securitizations (as defined below) was $456.0 million. TAXATION We have elected and quali

Filing Documents

• acre-20241231.htm (10-K) — 2597KB
• acreq4-24ex1084citibanksev.htm (EX-10.84) — 3987KB
• acreq4-24ex191insidertradi.htm (EX-19.1) — 44KB
• acreq4-24exhibit211.htm (EX-21.1) — 22KB
• acreq4-24exhibit231.htm (EX-23.1) — 4KB
• acreq4-24exhibit311.htm (EX-31.1) — 10KB
• acreq4-24exhibit312.htm (EX-31.2) — 10KB
• acreq4-24exhibit321.htm (EX-32.1) — 7KB
• acre-20241231_g1.jpg (GRAPHIC) — 195KB
• acre-20241231_g2.jpg (GRAPHIC) — 139KB
• 0001628280-25-005002.txt ( ) — 18401KB
• acre-20241231.xsd (EX-101.SCH) — 91KB
• acre-20241231_cal.xml (EX-101.CAL) — 86KB
• acre-20241231_def.xml (EX-101.DEF) — 537KB
• acre-20241231_lab.xml (EX-101.LAB) — 977KB
• acre-20241231_pre.xml (EX-101.PRE) — 737KB
• acre-20241231_htm.xml (XML) — 2082KB

Business

Item 1. Business 5

Risk Factors

Item 1A. Risk Factors 10

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 51

Cybersecurity

Item 1C. Cybersecurity 51

Properties

Item 2. Properties 53

Legal Proceedings

Item 3. Legal Proceedings 53

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 53 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54

[Reserved]

Item 6. [Reserved] 53

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 57

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 74

Financial Statements and Supplementary Data (included in F-pages)

Item 8. Financial Statements and Supplementary Data (included in F-pages) 77

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 77

Controls and Procedures

Item 9A. Controls and Procedures 77

Other Information

Item 9B. Other Information 78

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 78 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 78

Executive Compensation

Item 11. Executive Compensation 78

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 78

Certain Relationships and Related Party Transactions, and Director Independence

Item 13. Certain Relationships and Related Party Transactions, and Director Independence 79

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 79 Part IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 80

Form 10-K Summary

Item 16. Form 10-K Summary 86

Signatures

Signatures 2 Table of Contents

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Some of the statements contained in this annual report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend such statements to be covered by the safe harbor provisions contained therein. The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this annual report on Form 10-K. In addition, some of the statements in this annual report (including in the following discussion) constitute forward-looking statements, which relate to future events or the future performance or financial condition of Ares Commercial Real Estate Corporation ("ACRE" and, together with its consolidated subsidiaries, the "Company," "we," "us" and "our"). The forward-looking statements contained in this report involve a number of risks and uncertainties, including: global economic trends and economic conditions, including high inflation, slower growth, changes to fiscal and monetary policy, higher interest rates and currency fluctuations, as well as geopolitical instability, including conflicts between Russia and Ukraine and in the Middle East; changes in interest rates and credit spreads; management's estimate of current expected credit losses ("CECL") and current expected credit loss reserve ("CECL Reserve" or "CECL Reserves"); our ability to obtain, maintain, repay or refinance financing arrangements, including securitizations; market conditions and our ability to access alternative debt markets and additional debt and equity capital; the amount of commercial mortgage loans requiring refinancing; the demand for commercial real estate loans; our expected investment capacity and available capital; financing and advance rates for our target investments; our expected leverage; rates of defau

Business

Item 1. Business The following description of the business of Ares Commercial Real Estate Corporation ("ACRE") should be read in conjunction with the information included elsewhere in this annual report on Form 10-K for the year ended December 31, 2024. We refer to ACRE together with our consolidated subsidiaries as "we," "us," "Company," or "our," unless we specifically state otherwise or the context indicates otherwise. We refer to our manager, Ares Commercial Real Estate Management LLC, as our "Manager" or "ACREM," and the parent company of our Manager, Ares Management Corporation, together with its consolidated subsidiaries, as "Ares Management." GENERAL We are a specialty finance company primarily engaged in directly originating and investing in commercial real estate ("CRE") loans and related investments. We are externally managed by Ares Commercial Real Estate Management LLC ("ACREM" or our "Manager"), a subsidiary of Ares Management Corporation (NYSE: ARES) ("Ares Management"), a publicly traded, leading global alternative asset manager, pursuant to the terms of the Amended and Restated Management Agreement dated July 26, 2022, between us and our Manager (the "Management Agreement"). From the commencement of our operations in late 2011, we have been primarily focused on directly originating and managing a diversified portfolio of CRE debt-related investments for our own account. We are a Maryland corporation and completed our initial public offering (the "IPO") in May 2012. We have elected and qualified to be taxed as a real estate investment trust ("REIT") for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with our taxable year ended December 31, 2012. We generally will not be subject to United States federal income taxes on our REIT taxable income, as long as we annually distribute to stockholders an amount at least equal to our REIT taxable income prior to the deduction for di