2024-02-26 05:03:03 ET
Summary
- Ares Commercial Real Estate announced a 24% dividend cut due to stress in the office commercial real estate market.
- The REIT's reserve for expected credit losses has increased significantly, negatively impacting its fourth-quarter earnings.
- Despite the dividend cut, ACRE is an attractive income investment in FY 2024. I'll discuss why.
Ares Commercial Real Estate ( ACRE ) announced a 24% dividend cut last week as the company suffers from the fallout in the commercial real estate market. Like other commercial mortgage lenders, the REIT has seen an increase in its reserve for expected credit losses, which impacted Ares Commercial's P&L negatively in the fourth quarter. The earnings report and associated dividend cut caused shares to drop to a new 1-year low. However, since the REIT is now going to have better dividend coverage metrics going forward, I actually think shares of Ares Commercial Real Estate are a speculative buy for dividend investors....
Read the full article on Seeking Alpha
For further details see:
Ares Commercial: Dividend Cut, What Now?