Ares CRE unit obtains new funding

The real estate focused arm of Ares Management, led by Todd Schuster (pictured), has finalised a $180m deal with MetLife and a $308m securitisation of commercial real estate loans with another subsidiary.

Ares Commercial Real Estate Corporation, the real estate arm of Ares Management, has recently entered into a new $180 million credit facility with the Metropolitan Life Insurance Company. Through a transaction with another whole owned subsidiary, it has also closed on a $309 million securitisation, the firm said in a statement.

The MetLife facility is a secured funding facility that ACRE will use to finance commercial real estate loans. It will have an initial maturity date of August 12, 2017, with two one-year renewal options subject to certain conditions.

On 15 August, ACRE also closed on its ACRE Commercial Mortgage FL2014-2 securitisation. At closing, $309 million of investment grade bonds were sold to third parties at an initial weighted average coupon of LIBOR + 145 basis points before expenses, the statement said.

ACRE has approximately $1.7 billion of borrowing capacity from a variety of sources, including commercial banks, insurance companies and the capital markets. “These recent financing transactions underscore our commitment to expand and diversify our funding sources and to build a solid foundation for the growth of our business,” said Todd Schuster, president and chief executive of Ares Commercial Real Estate Corporation. “In 2014, we have accessed more than $1 billion of funding from a wide range of attractive sources.”

This branch of Ares is a specialty finance company focused on principal lending and mortgage banking of commercial real estate investments. Through its national direct origination platform, ACRE provides a range of financing solutions for commercial real estate owners and operators. Through ACRE Capital LLC, its mortgage banking business, it also originates and services multifamily residential mortgage loans, senior housing and healthcare facilities by utilizing the platforms of Fannie Mae and government agencies.

Ares Commercial Real Estate Corporation is taxed as a real estate investment trust and is externally managed by a subsidiary of Ares Management, a publicly traded global alternative investment firm with about $79 billion of assets under management as of June 30.