The following is a summary of the Ares Commercial Real Estate Corporation (ACRE) Q1 2024 Earnings Call Transcript:
Financial Performance:
Ares Commercial Real Estate Corporation reported a GAAP net loss of $12.3 million, or $0.23 per common share in Q1 2024.
Distributable earnings loss for Q1 2024 were $33.5 million, or $0.62 per common share, largely due to a realized loss of $45.7 million.
Excluding these losses, the company's distributable earnings stood at $12.2 million, or $0.22 per common share.
Ares' total third-party debt was less than $1.5 billion at March 31, 2024.
The company declared a cash dividend of $0.25 per common share for Q2 2024.
Business Progress:
Ares decreased outstanding principal balance of nonaccrual loans by $133 million and its exposure to the commercial office property sector by $70 million in Q1 2024.
They resolved 4 nonaccrual loans during Q1 2024, which increased distributable earnings by approximately $0.02 per common share.
The company is focusing on resolving underperforming loans and expects to take a $33 million risk-rated 5 loan, backed by an office building in California, as REO.
Ares' strategy includes optimizing the balance sheet, maintaining good levels of liquidity, and actively negotiating with lenders to provide more operational flexibility.
The management pointed towards potential market recovery due to transactions being consummated amid expectations of higher interest rates.
More details: Ares Commercial Real Estate Corp IR
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