ARES COMMERCIAL REAL ESTATE CORPORATION REPORTS THIRD QUARTER 2026 RESULTS

Quarterly Distributable Earnings of $0.12 per diluted share were below the declared $0.15 quarterly dividend.

Rhea-AI Summary

Ares Commercial Real Estate Corporation (NYSE:ACRE) reported third-quarter 2026 GAAP net income of $10.0 million, up year over year. Diluted earnings rose to $0.18 from $0.08 a year earlier. Distributable Earnings, a non-GAAP measure, were $6.7 million, or $0.12 per diluted share. Results included a $7.082 million gain from selling an owned real estate property, while total revenue declined to $13.513 million from $14.105 million.

After quarter-end, the company fully repaid and terminated its $90 million secured term loan. It declared an unchanged fourth-quarter dividend of $0.15 per share, payable January 15, 2027, to holders of record December 31, 2026. At September 30, credit-loss reserves were $139.325 million, versus $125.756 million at December 31, 2025. The company remains focused on resolving risk-rated 4 and 5 loans and reducing office and owned real estate investments.

9 points · 1 major

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0 major · 10 points

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Positive

• Major point$90 million secured term loan fully repaid and terminated after September 30, 2026. 48% of market cap
• Moderate pointThird-quarter GAAP net income rose to $10.046 million from $4.653 million; diluted EPS increased to $0.18 from $0.08.
• Moderate pointOwned real estate sale generated a $7.082 million gain in the third quarter.
• Moderate pointInterest income rose to $26.895 million quarterly and $79.555 million year-to-date, from $23.261 million and $73.858 million.
• Moderate pointTotal expenses fell to $8.734 million quarterly and $26.262 million year-to-date, from $10.000 million and $31.412 million.
• Moderate pointRealized loan losses fell to zero quarterly from $1.643 million; nine-month losses fell to $3.340 million from $34.643 million.
• Moderate pointNet loans held for investment increased to $1,598.792 million at September 30 from $1,403.050 million at December 31, 2025.
• Moderate pointOwned real estate, net declined to $75.544 million from $130.165 million, consistent with the company's reduction priority.
• Minor pointNine-month GAAP net income rose to $4.822 million from $2.963 million; diluted EPS increased to $0.09 from $0.05.

Negative

• Moderate pointThird-quarter Distributable Earnings of $6.742 million, or $0.12 per diluted share, were below the $0.15 quarterly dividend.
• Moderate pointInterest expense rose to $18.954 million quarterly and $55.497 million year-to-date, from $14.790 million and $49.081 million.
• Moderate pointNine-month credit-loss provision was $13.806 million, versus a $27.680 million reversal a year earlier. 7.3% of market cap
• Moderate pointCredit-loss reserves increased to $139.325 million at September 30 from $125.756 million at December 31, 2025.
• Moderate pointTotal liabilities increased to $1,259.600 million at September 30 from $1,108.574 million at December 31, 2025.

5 minor points

• Minor pointTotal revenue fell to $13.513 million quarterly and $41.329 million year-to-date, from $14.105 million and $41.618 million.
• Minor pointNet interest margin fell to $7.941 million quarterly and $24.058 million year-to-date, from $8.471 million and $24.777 million.
• Minor pointThird-quarter credit-loss provision was $1.803 million, versus a $2.190 million reversal a year earlier.
• Minor pointCash and cash equivalents fell to $21.687 million at September 30 from $29.289 million at December 31, 2025.
• Minor pointStockholders' equity fell to $491.711 million at September 30 from $509.568 million at December 31, 2025.

Key Figures

GAAP net income: $10.0 million Diluted earnings per share: $0.18 per diluted common share Distributable Earnings: $6.7 million +3 more

GAAP net income

$10.0 million

Third quarter 2026

Diluted earnings per share

$0.18 per diluted common share

Third quarter 2026

Distributable Earnings

$6.7 million

Third quarter 2026; non-GAAP measure

Diluted Distributable Earnings per share

$0.12 per diluted common share

Third quarter 2026

Secured term loan repaid

$90 million

Fully repaid and terminated subsequent to September 30, 2026

Fourth-quarter dividend

$0.15 per common share

Declared for fourth quarter 2026

Previous Earnings Reports

5 past events · Latest: Aug 04

Same Type 5 events

1. Aug 04

   Q2 2026 earnings

   24h Move

   +8.9%

   Reported GAAP net income of $4.4 million and Distributable Earnings of $6.9 million.

2. May 07

   Q1 2026 earnings

   24h Move

   -3.3%

   Reported a $9.6 million GAAP net loss alongside $3.2 million in Distributable Earnings.

3. Feb 10

   Q4 2025 earnings

   24h Move

   +11.7%

   Reported a $3.9 million GAAP net loss for the quarter and a $0.9 million full-year loss.

4. Nov 07

   Q3 2025 earnings

   24h Move

   +12.7%

   Reported $4.7 million GAAP net income and $5.5 million in Distributable Earnings.

5. Aug 05

   Q2 2025 earnings

   24h Move

   -8.0%

   Reported an $11.0 million GAAP net loss and a $27.9 million Distributable Loss.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap financial measure, real estate investment trust, mezzanine debt, +1 more

5 terms

gaap financial

"GAAP net income of $10.0 million or $0.18 per diluted common share"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial measure financial

"Distributable Earnings (Loss) is a non-GAAP financial measure."

A non-GAAP financial measure is a way companies present their financial results that excludes certain expenses or income to show how they believe their core business is performing. It matters because it can give a clearer picture of how the company is really doing, but it can also be used to make results look better than they actually are.

real estate investment trust financial

"elected and qualified to be taxed as a real estate investment trust"

A real estate investment trust (REIT) is a company that owns and manages income-producing properties—like apartment buildings, shopping centers, offices, or warehouses—and is required to pass most of its rental income to shareholders as dividends. Think of it as a shared property owner: instead of buying a whole building, investors buy a slice of a portfolio that pays regular income and can offer exposure to property values and rental markets without direct management. REITs matter to investors for predictable income, diversification, and liquidity compared with owning physical real estate.

mezzanine debt financial

"subordinate financings, mezzanine debt and preferred equity"

Mezzanine debt is a hybrid loan that sits between a company’s senior bank debt and equity ownership: it pays higher interest than regular loans because it takes on more risk, and often includes an option to convert into shares or warrants. Investors care because it offers higher potential returns than plain debt while carrying greater chance of loss or equity dilution if the company struggles, making it a middle-ground choice for yield and upside.

preferred equity financial

"mezzanine debt and preferred equity"

Preferred equity is a type of investment that sits between common stock and debt in a company's financial structure. It typically offers investors priority in receiving dividends and getting their money back if the company runs into trouble, making it somewhat safer than regular shares. Investors value preferred equity because it provides a steady income stream while still allowing some participation in the company's success.

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Third quarter GAAP net income of $10.0 million or $0.18 per diluted common share and Distributable Earnings¹ of $6.7 million or $0.12 per diluted common share

- Subsequent to the three months ended September 30, 2026 -

Fully repaid and terminated $90 million secured term loan

Declared fourth quarter 2026 dividend of $0.15 per common share

NEW YORK, Nov. 6, 2026 /PRNewswire/ -- Ares Commercial Real Estate Corporation (the "Company") (NYSE:ACRE), a specialty finance company primarily engaged in directly originating and investing in commercial real estate loans and related investments, reported generally accepted accounting principles ("GAAP") net income of $10.0 million or $0.18 per diluted common share and Distributable Earnings¹ of $6.7 million or $0.12 per diluted common share for the third quarter of 2026.

"During the third quarter, we continued to make progress on our strategic priority of reducing office and REO investments, as demonstrated by the sale of our REO office property which resulted in a gain," said Bryan Donohoe, Chief Executive Officer of Ares Commercial Real Estate Corporation. "At the same time, our diversified loan portfolio continues to exhibit overall stability, supported by the strength and broad market reach of the Ares Real Estate Debt platform."

"We remain focused on addressing our risk rated 4 and 5 loans, as resolving these investments will advance the repositioning of our portfolio and enhance our future earnings," said Jeff Gonzales, Chief Financial Officer of Ares Commercial Real Estate Corporation. "As a reflection of the confidence in the continued execution of our strategic priorities and future earnings potential, the Board declared a regular cash dividend of $0.15 per common share for the fourth quarter of 2026."

_________________________________
(1)	Distributable Earnings (Loss) is a non-GAAP financial measure. Refer to Schedule I for the definition and reconciliation of Distributable Earnings (Loss).

COMMON STOCK DIVIDEND

On August 4, 2026, the Board of Directors of the Company declared a regular cash dividend of $0.15 per common share for the third quarter of 2026. The third quarter 2026 dividend was paid on October 15, 2026 to common stockholders of record as of September 30, 2026.

On November 6, 2026, the Board of Directors of the Company declared a regular cash dividend of $0.15 per common share for the fourth quarter of 2026. The fourth quarter 2026 dividend will be payable on January 15, 2027 to common stockholders of record as of December 31, 2026.

ADDITIONAL INFORMATION

The Company issued a presentation of its third quarter 2026 results, which can be viewed at www.arescre.com on the Investor Resources section of our home page under Events and Presentations. The presentation is titled "Third Quarter 2026 Earnings Presentation."

CONFERENCE CALL AND WEBCAST INFORMATION

On Friday, November 6, 2026, the Company invites all interested persons to attend its webcast/conference call at 10:00 a.m. (Eastern Time) to discuss its third quarter 2026 financial results.

All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Home page of the Investor Resources section of the Company's website at www.arescre.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing +1 (833) 354-6854. International callers can access the conference call by dialing +1 (785) 838-9343. Please provide passcode ACREQ326. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected. For interested parties, an archived replay of the call will be available through December 6, 2026 at 5:00 p.m. (Eastern Time) to domestic callers by dialing +1 (800) 753-6121 and to international callers by dialing +1 (402) 220-2676. An archived replay will also be available through December 6, 2026 on a webcast link located on the Home page of the Investor Resources section of the Company's website.

ABOUT ARES COMMERCIAL REAL ESTATE CORPORATION

Ares Commercial Real Estate Corporation (the "Company") is a specialty finance company primarily engaged in directly originating and investing in commercial real estate loans and related investments. Through its national direct origination platform, the Company provides a broad offering of flexible and reliable financing solutions for commercial real estate owners and operators. The Company invests in whole and co-invested senior mortgage loans, as well as subordinate financings, mezzanine debt and preferred equity, with an emphasis on providing value added financing on a variety of properties located in liquid markets across the United States. 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 Corporation. 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.

FORWARD-LOOKING STATEMENTS

Statements included herein or on the webcast / conference call may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These statements relate to future events or the Company's future performance or financial condition and include, but are not limited to, statements about potential earnings, potential reduction in office and real estate owned investments, the resolution of underperforming loans, increased investment activity, liquidity management, reduction or increase of CECL reserve, reduction or increase of available borrowings, the industry and the loan market. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including global economic trends and economic conditions, including slower growth, changes to fiscal and monetary policy, inflation, labor shortages, changing interest rates, foreign currency exchange volatility and uncertainties caused by tariffs and trade disputes, as well as geopolitical instability, changes in interest rates and credit spreads, management's estimate of current expected credit losses and current expected credit loss reserve, the amount of commercial mortgage loans requiring refinancing, the demand for commercial real estate loans, the Company's expected investment capacity and available capital, rates of default or decreased recovery rates on the Company's target investments, the Company's business and investment strategy, the Company's projected operating results, the ability of Ares Commercial Real Estate Management LLC ("ACREM" or the Company's "Manager") to locate suitable investments for the Company, monitor, service and administer the Company's investments and execute its investment strategy, and the risks described from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risk factors described in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K, filed with the SEC on February 10, 2026. Any forward-looking statement, including any contained herein, speaks only as of the time of this press release and Ares Commercial Real Estate Corporation undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call. Projections and forward-looking statements are based on management's good faith and reasonable assumptions, including the assumptions described herein.

INVESTOR RELATIONS CONTACTS

Ares Commercial Real Estate Corporation
Carl Drake or John Stilmar
(888) 818-5298
iracre@aresmgmt.com

ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
		As of
		September 30, 2026		December 31, 2025
		(unaudited)
ASSETS
Cash and cash equivalents		$           21,687		$           29,289
Restricted cash ($1,108 related to consolidated VIEs as of December 31, 2025)		39,942		37,868
Loans held for investment ($138,950 related to consolidated VIEs as of December 31, 2025)		1,738,117		1,528,806
Current expected credit loss reserve		(139,325)		(125,756)
Loans held for investment, net of current expected credit loss reserve		1,598,792		1,403,050
Real estate owned held for investment, net ($52,634 related to consolidated VIEs as of December 31, 2025)		75,544		130,165
Other assets ($76 of interest receivable related to consolidated VIEs as of December 31, 2025)		15,346		17,770
Total assets		$        1,751,311		$        1,618,142
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Secured funding agreements		$        1,107,019		$          858,176
Secured term loan		89,911		89,360
Collateralized loan obligation securitization debt (consolidated VIEs)		—		99,921
Due to affiliate		4,207		4,061
Dividends payable		8,458		8,442
Other liabilities ($257 of interest payable related to consolidated VIEs as of December 31, 2025)		50,005		48,614
Total liabilities		1,259,600		1,108,574
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share, 450,000,000 shares authorized at September 30, 2026 and December 31, 2025 and 55,486,279 and 55,026,453 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively		532		532
Additional paid-in capital		823,504		820,827
Accumulated earnings (deficit)		(332,325)		(311,791)
Total stockholders' equity		491,711		509,568
Total liabilities and stockholders' equity		$        1,751,311		$        1,618,142

 

ARES COMMERCIAL REAL ESTATE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2026		2025		2026		2025
Revenue:
Interest income		$    26,895		$    23,261		$    79,555		$    73,858
Interest expense		(18,954)		(14,790)		(55,497)		(49,081)
Net interest margin		7,941		8,471		24,058		24,777
Revenue from real estate owned		5,572		5,634		17,271		16,841
Total revenue		13,513		14,105		41,329		41,618
Expenses:
Management and incentive fees to affiliate		2,388		2,420		7,182		7,417
Professional fees		603		526		2,122		2,077
General and administrative expenses		1,642		1,733		4,783		5,448
General and administrative expenses reimbursed to affiliate		779		781		2,418		2,808
Expenses from real estate owned		3,322		4,540		9,757		13,662
Total expenses		8,734		10,000		26,262		31,412
(Provision for) reversal of current expected credit losses, net		(1,803)		2,190		(13,806)		27,680
Realized losses on loans		—		(1,643)		(3,340)		(34,643)
Realized gain on sale of real estate owned		7,082		—		7,082		—
Income (loss) before income taxes		10,058		4,652		5,003		3,243
Income tax expense (benefit), including excise tax		12		(1)		181		280
Net income (loss) attributable to common stockholders		$    10,046		$     4,653		$     4,822		$     2,963
Earnings (loss) per common share:
Basic earnings (loss) per common share		$      0.18		$      0.08		$      0.09		$      0.05
Diluted earnings (loss) per common share		$      0.18		$      0.08		$      0.09		$      0.05
Weighted average number of common shares outstanding:
Basic weighted average shares of common stock outstanding		55,400,693		54,904,862		55,363,717		54,863,820
Diluted weighted average shares of common stock outstanding		56,385,576		55,775,825		56,341,473		55,746,940
Dividends declared per share of common stock1		$      0.15		$      0.15		$      0.45		$      0.45

_________________________
(1)	There is no assurance dividends will continue at these levels or at all.

SCHEDULE I

Reconciliation of Net Income (Loss) to Non-GAAP Distributable Earnings (Loss)

Distributable Earnings (Loss) is a non-GAAP financial measure that helps the Company evaluate its financial performance excluding the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative of its current loan origination portfolio and operations. To maintain the Company's REIT status, the Company is generally required to annually distribute to its stockholders substantially all of its taxable income. The Company believes the disclosure of Distributable Earnings (Loss) provides useful information to investors regarding the Company's ability to pay dividends, which is one of the principal reasons the Company believes investors invest in the Company. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Distributable Earnings (Loss) is defined as net income (loss) attributable to common stockholders computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fees the Company pays to its Manager, depreciation and amortization (to the extent that any of the Company's target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), one-time events pursuant to changes in GAAP and certain non-cash charges after discussions between the Company's Manager and the Company's independent directors and after approval by a majority of the Company's independent directors. Loan balances that are deemed to be uncollectible are written-off as a realized loss and are included in Distributable Earnings (Loss). Distributable Earnings (Loss) is aligned with the calculation of "Core Earnings," which is defined in the Management Agreement and is used to calculate the incentive fees the Company pays to its Manager.

Reconciliation of net income (loss) attributable to common stockholders, the most directly comparable GAAP financial measure, to Distributable Earnings (Loss) is set forth in the table below for the three and twelve months ended September 30, 2026 ($ in thousands):

	For the Three Months Ended September 30, 2026		For the Twelve Months Ended September 30, 2026
Net income (loss) attributable to common stockholders	$                   10,046		$                       959
Stock-based compensation	898		3,570
Incentive fees to affiliate	—		—
Depreciation and amortization of real estate owned	(6,005)		(2,910)
Provision for (reversal of) current expected credit losses, net	1,803		23,641
Distributable Earnings (Loss)	$                    6,742		$                    25,260
Net income (loss) attributable to common stockholders	$                      0.18		$                       0.02
Stock-based compensation	0.02		0.06
Incentive fees to affiliate	—		—
Depreciation and amortization of real estate owned	(0.11)		(0.05)
Provision for (reversal of) current expected credit losses, net	0.03		0.43
Basic Distributable Earnings (Loss) per common share	$                      0.12		$                       0.46
Net income (loss) attributable to common stockholders	$                      0.18		$                       0.02
Stock-based compensation	0.02		0.06
Incentive fees to affiliate	—		—
Depreciation and amortization of real estate owned	(0.11)		(0.05)
Provision for (reversal of) current expected credit losses, net	0.03		0.42
Diluted Distributable Earnings (Loss) per common share	$                      0.12		$                       0.45

_________________________

Numbers presented may not foot due to rounding.

 

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SOURCE Ares Commercial Real Estate Corporation

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were ACRE's third-quarter 2026 earnings?

Ares Commercial Real Estate reported $10.0 million in GAAP net income, or $0.18 per diluted common share, for the third quarter of 2026. Non-GAAP Distributable Earnings were $6.7 million, or $0.12 per diluted common share.

When will ACRE pay its fourth-quarter 2026 dividend?

The fourth-quarter dividend of $0.15 per common share is payable January 15, 2027, to stockholders of record as of December 31, 2026. The amount is unchanged from the third-quarter dividend.

How does ACRE calculate Distributable Earnings?

Distributable Earnings adjusts GAAP net income for specified items, including non-cash equity compensation, incentive fees and certain non-cash adjustments. Loan balances deemed uncollectible are written off as realized losses and remain included in this measure. It is not a substitute for GAAP results.