2024-02-06 23:54:51 ET
Summary
- Ares Commercial Real Estate is a commercial mortgage REIT with a diverse portfolio of secured loans.
- The mREIT remains threatened by declining asset values, particularly in the office, multifamily, and industrial sectors.
- Weakness in the commercial real estate market, particularly in the office, multifamily, and industrial sectors, poses risks for ACRE and similar funds.
When it comes to investing in real estate, there are myriad considerations around variables including geography, property types, tenancy, lease structures, and the list goes on. That said, we can boil down investment in real estate and other assets into two categories. Do you, as an investor, want to own or loan ? Investments take one of two forms. Either one invests directly in target company or asset, purchasing equity. Or, one can invest by buying a financial obligation of a debtor, purchasing debt. Investors can categorize public real estate investment trusts similarly. There are equity REITs, which buy equity in properties, and mortgage REITs, which hold mortgage loans. There are also a variety of other types of REITs including private REITs and public, non-listed REITs....
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Ares Commercial Real Estate: Still Threatened By Declining Asset Values (Rating Downgrade)