HARTFORD, Conn., June 29, 2016 /PRNewswire/ -- Cornerstone Real
Estate Advisers ("Cornerstone"), one of the world's largest real estate-focused investment managers, today announced a definitive
agreement to acquire ACRE Capital Holdings LLC ("ACRE Capital"), the agency lending subsidiary of Ares Commercial Real
Estate Corporation (NYSE: ACRE), for $93 million. The transaction is expected to close as early as
the third quarter of 2016, pending regulatory approvals.
ACRE Capital originates and services multifamily residential mortgage loans, senior housing and healthcare facility loans by
utilizing programs overseen by governmental agencies and government-sponsored entities. The company is one of only 19
lenders that hold licenses with all three agencies (Fannie Mae, Freddie Mac and the Federal Housing Administration). Based in
Plano, Texas, and operating in seven national offices, ACRE Capital has 106 employees, including
50 dedicated lending professionals. The company manages a servicing portfolio of approximately $4.4
billion of unpaid principal balance of GSE and HUD loans, and is an S&P rated primary servicer.
For Cornerstone, the acquisition of ACRE Capital significantly expands the firm's commercial loan origination platform,
creating a reliable source of funding and nearly doubling the size of the company's multifamily loan portfolio, from
approximately $5 billion to $10 billion. Additionally, the companies are highly complementary, with
Cornerstone traditionally originating larger balance loans and ACRE Capital focusing on smaller balance loans, on behalf of the
Agencies and HUD.
Scott Brown, Global President and Chief Executive Officer of Cornerstone, commented: "The
acquisition of ACRE Capital expands Cornerstone's national commercial lending platform, further strengthening our relationships
with multifamily borrowers, while providing access to other sectors including senior housing and healthcare. We see significant
growth in all of these sectors and will be uniquely positioned to deliver best in class executions for our clients. The
affordable housing segment of the marketplace is under-served, and acquiring ACRE Capital will allow us to meaningfully address
the current and looming scarcity in affordable residential housing and increase lending to communities nationwide. We look
forward to joining forces with the professionals at ACRE Capital to expand opportunities for their borrowers."
James Henderson, Chief Investment Officer of Cornerstone's Alternative Investments Group, will
manage ACRE Capital within his group post-acquisition. Mr. Henderson commented: "The acquisition of ACRE Capital is highly
complementary to Cornerstone's long-standing industry leadership in multifamily lending and investment. For multifamily
owners, we can begin to provide a true end-to-end solution, including joint venture equity, preferred equity, mezzanine finance
and a variety of bridge lending and first mortgage solutions. Furthermore, the growth prospects in healthcare and senior
housing are compelling."
Kimberlite Group, LLC provided financial advice and Goodwin Procter LLP provided legal advice to Cornerstone, and Proskauer
Rose LLP provided legal advice to Ares Commercial Real Estate Corporation.
About Cornerstone Real Estate Advisers
Cornerstone Real Estate Advisers LLC, with subsidiary and affiliate offices in the U.S., UK, Europe, and Asia, is one of the largest global real estate-focused
investment managers with $50.6 billion in global assets under management as of March 31, 2016. Cornerstone's current portfolio of equity and debt investments in the multi-family sector
exceeds $9.5 billion. It provides core, value-added and opportunistic investment and advisory
services, including a comprehensive suite of private and public real estate debt, equity and securities expertise and services,
to institutional and other qualified investors around the globe. Cornerstone, a wholly owned subsidiary of Babson Capital
Management, one of the world's leading global asset managers, is a member of the MassMutual Financial Group. For more
information, visit www.cornerstoneadvisers.com.
About Ares Commercial Real Estate Corporation
Ares Commercial Real Estate Corporation is a specialty finance company primarily engaged in originating and investing in
commercial real estate loans and related investments. Through Ares Commercial Real Estate Corporation's national direct
origination platform, it provides a broad offering of flexible financing solutions for commercial real estate owners and
operators. Ares Commercial Real Estate Corporation elected and qualified to be taxed as a real estate investment trust and is
externally managed by a subsidiary of Ares Management, L.P. (NYSE:ARES), a publicly traded, leading global alternative asset
manager with approximately $94 billion of assets under management as of March 31, 2016. For
more information, please visit www.arescre.com. The contents
of such website are not, and should not be deemed to be, incorporated by reference herein.
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SOURCE Cornerstone Real Estate Advisers