Ares Commercial Real Estate Corporation (ACRE)
Ares Commercial Real Estate Corporation (ACRE) is a specialty finance company focused on originating and investing in commercial real estate loans. As a REIT, it provides financing solutions to owners, operators, and sponsors of CRE properties in the United States.
Company Overview
Ares Commercial Real Estate (ACRE) offers investors high dividend yields through strategic commercial real estate debt investments. With a focus on senior mortgage loans and a diversified portfolio, ACRE provides exposure to the CRE market while operating as a REIT, distributing income to shareholders.
Investment Thesis
Ares Commercial Real Estate (ACRE) presents a compelling investment opportunity due to its high dividend yield of 11.54% and strategic focus on commercial real estate debt. The company's diversified portfolio of senior mortgage loans, subordinate debt, and mezzanine loans provides a balanced risk profile within the CRE market. Upcoming catalysts include potential interest rate cuts by the Federal Reserve, which could reduce borrowing costs and stimulate CRE investment. Additionally, ongoing active management by Ares Commercial Real Estate Management LLC aims to optimize portfolio performance and capitalize on market opportunities. While the negative P/E ratio of -37.07 and profit margin of -29.1% warrant caution, the company's high gross margin of 73.3% indicates strong underlying profitability potential. Successful execution of its investment strategy and favorable macroeconomic conditions could drive significant value for shareholders.
Key Highlights
- Dividend Yield of 11.54% offers a high income stream for investors.
- Gross Margin of 73.3% indicates efficient management of revenue and costs associated with loan origination and investment.
- Market Cap of $0.29B reflects the company's current size and market valuation.
- Beta of 1.27 suggests higher volatility compared to the overall market.
- Negative P/E Ratio of -37.07 indicates current losses, requiring further investigation into the company's profitability.
Competitors
Strengths
- High dividend yield attracts income-seeking investors.
- Diversified portfolio of CRE debt investments.
- Experienced management team at Ares Commercial Real Estate Management LLC.
- REIT structure provides tax advantages and income distribution.
Weaknesses
- Negative P/E ratio and profit margin indicate current losses.
- Sensitivity to interest rate fluctuations and economic cycles.
- Reliance on external management by Ares Commercial Real Estate Management LLC.
- Higher beta suggests increased volatility compared to the market.
Catalysts
- Upcoming: Potential interest rate cuts by the Federal Reserve could stimulate CRE investment.
- Ongoing: Active portfolio management by Ares Commercial Real Estate Management LLC.
- Ongoing: Expansion into new CRE markets and asset classes.
- Ongoing: Strategic partnerships with CRE developers.
Risks
- Potential: Rising interest rates could increase borrowing costs and reduce CRE investment.
- Potential: Economic downturn could lead to increased loan defaults.
- Ongoing: Dependence on external management by Ares Commercial Real Estate Management LLC.
- Ongoing: Competition from other mortgage REITs and specialty finance companies.
- Potential: Regulatory changes could impact the REIT structure and operations.
Growth Opportunities
- Expansion into Underserved CRE Markets: ACRE can pursue growth by targeting underserved segments within the commercial real estate market, such as smaller cities or niche property types. This expansion could increase loan origination volume and diversify the portfolio, mitigating risk. The market size for underserved CRE segments is estimated to be substantial, with potential for significant growth over the next 3-5 years. ACRE's expertise in CRE lending provides a competitive advantage in identifying and capitalizing on these opportunities.
- Increased Focus on Mezzanine Lending: Mezzanine loans offer higher yields compared to senior mortgage loans, presenting an opportunity to enhance portfolio returns. By increasing its allocation to mezzanine debt, ACRE can boost its overall profitability. The market for mezzanine financing in CRE is growing, driven by demand for flexible capital solutions. ACRE's existing capabilities in debt origination and management position it well to capture a larger share of this market.
- Strategic Partnerships with CRE Developers: Forming strategic partnerships with commercial real estate developers can provide ACRE with a pipeline of new loan opportunities. These partnerships can also enhance ACRE's market intelligence and access to off-market deals. The CRE development market is expected to remain active, driven by demand for new and renovated properties. ACRE's financial resources and lending expertise make it an attractive partner for developers.
- Leveraging Technology for Enhanced Efficiency: Investing in technology to streamline loan origination, underwriting, and portfolio management can improve operational efficiency and reduce costs. This includes implementing AI-powered tools for risk assessment and data analytics. The adoption of technology in the CRE finance industry is accelerating, with significant potential for cost savings and improved decision-making. ACRE's ability to embrace and integrate new technologies will be crucial for maintaining a competitive edge.
- Geographic Diversification Beyond Core Markets: While ACRE primarily operates in the United States, exploring opportunities for geographic diversification can reduce concentration risk and enhance growth prospects. This could involve expanding into select international markets with attractive CRE fundamentals. The global CRE market offers a diverse range of investment opportunities, with varying risk-return profiles. ACRE's expertise in CRE lending can be adapted to new markets, although careful due diligence and risk management are essential.
Opportunities
- Expansion into underserved CRE markets.
- Increased focus on mezzanine lending for higher returns.
- Strategic partnerships with CRE developers.
- Leveraging technology for enhanced efficiency.
Threats
- Rising interest rates could increase borrowing costs and reduce CRE investment.
- Economic downturn could lead to increased loan defaults.
- Increased competition from other mortgage REITs and specialty finance companies.
- Regulatory changes could impact the REIT structure and operations.
Competitive Advantages
- Established relationships with CRE owners, operators, and sponsors.
- Expertise in CRE lending and investment.
- Access to capital through its REIT structure.
- Experienced management team at Ares Commercial Real Estate Management LLC.
About
Ares Commercial Real Estate Corporation (ACRE) was founded in 2011 and is headquartered in New York City. As a specialty finance company, ACRE focuses on originating and investing in commercial real estate (CRE) loans and related investments across the United States. The company’s primary objective is to provide comprehensive financing solutions to owners, operators, and sponsors of CRE properties. ACRE originates a variety of debt products, including senior mortgage loans, subordinate debt products, and mezzanine loans. Additionally, the company invests in real estate preferred equity investments and other CRE investments, such as commercial mortgage-backed securities (CMBS). By offering a diverse range of financing options, ACRE caters to the varied needs of its clientele within the commercial real estate sector. The company operates as a real estate investment trust (REIT) under the Internal Revenue Code of 1986, allowing it to pass income directly to shareholders. Ares Commercial Real Estate Management LLC serves as the manager of the company, overseeing its investment strategies and operations. ACRE's focus on CRE debt and its REIT structure make it a unique player in the financial services sector.
What They Do
- Originates senior mortgage loans for commercial real estate properties.
- Provides subordinate debt products to CRE owners and operators.
- Offers mezzanine loans to fill capital gaps in CRE projects.
- Invests in real estate preferred equity investments.
- Acquires and manages commercial mortgage-backed securities (CMBS).
- Provides financing solutions for owners, operators, and sponsors of CRE properties.
Business Model
- Originates and invests in commercial real estate loans.
- Generates revenue through interest income and fees.
- Operates as a real estate investment trust (REIT), distributing income to shareholders.
- Manages a portfolio of CRE debt investments.
Industry Context
Ares Commercial Real Estate operates within the REIT - Mortgage industry, a segment characterized by companies that invest in mortgages and mortgage-backed securities. The industry is influenced by interest rate movements, economic growth, and commercial real estate market conditions. Competition includes other mortgage REITs and specialty finance companies. The current market environment presents both challenges and opportunities, with fluctuating interest rates and evolving CRE dynamics. ACRE's ability to navigate these conditions and capitalize on market trends will be crucial for its success. The industry is sensitive to regulatory changes and economic cycles, requiring companies to maintain strong risk management practices.
Key Customers
- Owners of commercial real estate properties.
- Operators of commercial real estate properties.
- Sponsors of commercial real estate projects.
- Real estate developers.
Financials
Recent Quarterly Results
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q4 2025 | $29M | -$4M | $-0.07 |
| Q3 2025 | $16M | $5M | $0.08 |
| Q1 2025 | $15M | $9M | $0.17 |
Source: Company filings
Chart & Info
Price Chart
Ares Commercial Real Estate Corporation (ACRE) stock price: $5.25 (+0.00, +0.00%)
Why Bull
- •Recent insider buying suggests confidence in ACRE's future prospects, indicating that those closest to the company believe in its growth.
- •Community sentiment has shifted positively, with discussions highlighting ACRE's strategic initiatives and potential market advantages.
- •Bullish analysts are emphasizing ACRE's innovative approaches to real estate investment, which could attract more investors looking for growth.
- •Market developments in the real estate sector are showing signs of recovery, which could benefit ACRE as it positions itself to capitalize on these trends.
Why Bear
- •Some community members express concern about ACRE's exposure to market volatility, particularly in the current economic environment.
- •Recent bearish sentiment stems from worries about rising interest rates impacting real estate investments, potentially affecting ACRE's performance.
- •Insider selling activity has raised eyebrows, leading to speculation about the company's short-term outlook and potential challenges ahead.
- •Market perception remains cautious, with some investors questioning ACRE's ability to navigate competitive pressures in the real estate sector.
Latest News
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Earnings Scheduled For February 10, 2026
benzinga · Feb 10, 2026
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Earnings Scheduled For November 7, 2025
benzinga · Nov 7, 2025
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Earnings Scheduled For August 5, 2025
benzinga · Aug 5, 2025
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Earnings Scheduled For May 7, 2025
benzinga · May 7, 2025
Technical Analysis
Rationale
AI-generated technical analysis for ACRE including trend direction, momentum, and pattern recognition.
What to Watch
Key support and resistance levels, volume signals, and upcoming events.
Risk Management
Position sizing, stop-loss levels, and risk-reward assessment.
Community
Discussion
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Sentiment
Community sentiment and discussion activity for ACRE.
Make a Prediction
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Current price: $5.25
Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for ACRE.
Price Targets
Median: $5.00 (-4.7% from current price)
Insider Flow (30d)
MoonshotScore
Score Factors
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Revenue Growth 2/100
Revenue declined -2.8% YoY, signaling shrinking demand or market headwinds.
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Gross Margin 10/100
Gross margin of 71.6% shows excellent pricing power and a strong competitive moat.
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Operating Leverage 4/100
Limited operating leverage due to slower revenue growth, keeping profit scaling constrained.
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Cash Runway 5/100
Limited cash of $29M could constrain flexibility; watch for dilution risk or debt issuance.
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R&D Intensity 5/100
R&D spending data is currently unavailable for this company.
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Insider Activity 6/100
No significant insider buying or selling recently, which is neutral for the stock outlook.
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Short Interest 10/100
Daily turnover of 1.20% indicates healthy liquidity with smooth entry/exit for investors.
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Price Momentum 6/100
Mixed technical signals (above sma50, above sma200); price trend is inconclusive and may consolidate.
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News Sentiment 5/100
News sentiment is mixed, with a balance of positive and negative coverage in recent days.
What does this score mean?
The MoonshotScore rates ACRE's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Competitors & Peers
Frequently Asked Questions
What does Ares Commercial Real Estate Corporation do?
Ares Commercial Real Estate Corporation (ACRE) is a specialty finance company that focuses on originating and investing in commercial real estate (CRE) loans and related investments in the United States. The company provides financing solutions to owners, operators, and sponsors of CRE properties, offering a range of debt products including senior mortgage loans, subordinate debt, and mezzanine loans. ACRE operates as a real estate investment trust (REIT), which means it distributes a significant portion of its income to shareholders. This structure allows investors to participate in the CRE market through a publicly traded vehicle.
Is ACRE stock a good buy?
ACRE stock presents a mixed investment profile. Its high dividend yield of 11.54% is attractive for income-seeking investors. However, the negative P/E ratio of -37.07 and profit margin of -29.1% raise concerns about current profitability. The company's high gross margin of 73.3% suggests potential for improved earnings. Investors should carefully consider the risks associated with interest rate fluctuations and economic cycles, as well as the company's reliance on external management. ACRE's growth opportunities in underserved markets and mezzanine lending could drive future value.
What are the main risks for ACRE?
The main risks for ACRE include rising interest rates, which could increase borrowing costs and reduce CRE investment activity. An economic downturn could lead to increased loan defaults and negatively impact the company's portfolio performance. ACRE also faces competition from other mortgage REITs and specialty finance companies. Its reliance on external management by Ares Commercial Real Estate Management LLC introduces potential conflicts of interest. Regulatory changes affecting REITs could also pose a risk to the company's operations and financial performance. Investors should carefully assess these risks before investing in ACRE.
Is ACRE a good stock to buy?
Whether ACRE is a good investment depends on your financial goals, risk tolerance, and investment horizon. Review the Investment Thesis, SWOT analysis, and Risk sections on this page. Always do your own research and consult a financial advisor before investing.
What is the ACRE MoonshotScore?
MoonshotScore is our proprietary AI-powered rating system that evaluates stocks based on growth potential, financial health, market momentum, and risk factors. It helps investors quickly identify high-potential opportunities. Check the MoonshotScore badge on this page for the current rating.
How often is ACRE data updated?
Stock prices are updated in real-time during market hours (9:30 AM - 4:00 PM ET). Company fundamentals, analyst ratings, and AI insights are refreshed daily. News is updated continuously throughout the day.
What are the growth catalysts for ACRE?
Growth catalysts vary by company and may include new product launches, market expansion, earnings surprises, partnerships, or industry tailwinds. Check the Catalysts section on this page for specific drivers relevant to Ares Commercial Real Estate Corporation.
Who are ACRE's main competitors?
Ares Commercial Real Estate Corporation's competitors depend on its industry and market segments. Check the Competitors section on this page for a list of direct competitors and how ACRE compares.
What do analysts say about ACRE?
Analyst ratings and price targets for ACRE are aggregated from multiple sources. Check the Analyst Consensus tab for buy/hold/sell ratings and the current consensus price target.
What is ACRE's market cap?
Market capitalization reflects the total market value of ACRE's outstanding shares. Check the Key Statistics section at the top of this page for the current market cap and other key financial metrics.
How has ACRE stock performed recently?
Check the Chart & Info tab for ACRE's recent price action, including daily, weekly, and monthly performance charts with technical indicators.
What are the risks of investing in ACRE?
Every stock carries risk. Check the Risks and Weaknesses sections on this page for ACRE-specific risk factors. Consider macroeconomic conditions, industry trends, and company-specific challenges.
Are insiders buying or selling ACRE?
Insider activity can signal management confidence. Check the Insider Flow tab for recent insider buys, sells, and exercise transactions for ACRE.
Is ACRE a good stock for beginners?
Ares Commercial Real Estate Corporation (ACRE) can be suitable for beginner investors depending on several factors. Look at the MoonshotScore on this page for an overall AI-powered assessment of growth potential and risk. Beginners should also check the company's market cap (larger companies tend to be less volatile), gross margin (higher margins mean stronger business fundamentals), and cash position (healthy cash reduces bankruptcy risk). Always start with a small position size and never invest money you cannot afford to lose.
How risky is ACRE for first-time investors?
Every stock carries risk, including Ares Commercial Real Estate Corporation (ACRE). First-time investors should review the Risk Factors section on this page for company-specific risks. Key risk indicators include price volatility (check the chart for daily swings), insider selling activity (see Insider Flow tab), and cash runway (see MoonshotScore breakdown). A diversified portfolio with an index fund like the S&P 500 as a core holding is generally recommended before adding individual stocks like ACRE.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Data provided for informational purposes only.
- Stock data pending update. Financial data is based on the most recent available information.
- The analysis is based on publicly available information and may not reflect all factors relevant to an investment decision.