I'm Deeply Worried About Ares Commercial Real Estate's 14% Yield (Rating Downgrade)

Summary

  • Credit quality in the commercial real estate market is dropping, with offices and multifamily apartments being the worst affected areas.
  • Ares Commercial Real Estate Corporation has significant exposure to these struggling sectors, leading to a net loss in Q4 2023 and an increase in loan loss reserves.
  • ACRE has cut its dividend by 24% and may face further challenges in maintaining profitability and protecting its dividend in the future.
  • Looking for more investing ideas like this one? Get them exclusively at iREIT® on Alpha. Learn More »

Dollar-Zerstörung

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Introduction

As most of my regular readers will know, I always try to incorporate the "bigger picture" into my research, as this allows me to get a good understanding of factors that may impact the stocks in our portfolios

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This article was written by

42.89K Followers

Leo Nelissen is an analyst focusing on major economic developments related to supply chains, infrastructure, and commodities. He is a contributing author for iREIT®+HOYA Capital.

As a member of the iREIT®+HOYA Capital team, Leo aims to provide insightful analysis and actionable investment ideas, with a particular emphasis on dividend growth opportunities. Learn More.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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