Ares Commercial Real Estate Corporation

And welcome to ARIES Commercial Real Estate Corporation's conference call to discuss the company's third quarter 2021 financial results. As a reminder, this conference call is being recorded on November 3rd, 2021. I will now turn the call over to Veronica Mayer from Investor Relations.

Good afternoon, and thank you for joining us on today's conference call. I am joined today by our CEO, Brian Donahoe. Tasik Yoon, our CFO, and Carl Drake, our head of public company investor relations. In addition to our press release and the 10Q that we filed with the SEC, we have posted an earnings presentation under the investor resources section of our website at www.arescre.com. Before we begin, I want to remind everyone that comments made during the course of this conference call and webcast and the accompanying documents contain forward-looking statements and are subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may, and similar expressions. These forward-looking statements are based on management's current expectations of market conditions and management's judgment. These statements are not guarantees of future performance, condition, or results and involve a number of risks and uncertainties. The company's actual results could differ materially from those expressed in the forward-looking statements. as a result of a number of factors, including those listed in its SEC filings. ARIES Commercial Real Estate Corporation assumes no obligation to update any such forward-looking statements. During this conference call, we will refer to certain non-GAAP financial measures. We use these as measures of operating performance, and these measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. These measures may not be comparable to like-titled measures used by other companies. Now, I would like to turn the call over to our CEO, Brian Donohoe.

Thanks, and good afternoon, everyone. This morning, we reported another quarter of strong and stable results with distributable earnings of 37 cents per share, continuing to fully cover our regular and supplemental dividends. We originated $485 million in new commitments during the quarter, bringing our total year-to-date originations to $1 billion. In the first nine months of the year, we have already surpassed our previous yearly record of $955 million. At quarter end, the portfolio was $2.4 billion, up 33% year-over-year, with portfolio growth in all four quarters. While we are seeing a surge in commercial real estate activity and improving fundamentals, our originations momentum also reflects the growing presence of the broader ARIES real estate platform. The Aries Real Estate Group now stands at $36.5 billion in global assets under management, with approximately 200 investment professionals in 17 offices, including Aries acquisition of the Black Creek Group. We are a constant presence in the market, continuously buying, selling, borrowing, and lending against high-quality real estate throughout the top MSAs in the U.S. and Europe. There are numerous benefits to this. First and foremost is the depth of the relationships that we maintain in our target markets, which help us drive value in our investment universe. When you combine our relationships and the opportunities generated with the data, information, and experience within the ARIES platform, the result is a broad funnel and a very selective investment process. For example, we are pursuing more investments in the industrial, and industrial logistics sectors, which align with the activity and conviction of the broader ARIES platform. As of quarter end, the ARIES real estate platform owns over 200 industrial investments and approximately 145 million square feet of industrial space. ACRE has the opportunity to benefit from this in-house product expertise, which allows us to lend earlier in the lifecycle of an industrial asset. As our debt platform also continues to scale, currently standing at $9 billion of AUM across all our vehicles, we have become an even more attractive partner to the highest quality institutional sponsors. This quarter, we had an almost even split between repeat sponsor business and new sponsors. Our incumbent borrowers appreciate the reliability and efficiency of our execution, and these relationships enable us to make new commitments with attractive risk return profiles. We are also pleased to have provided financing to new relationships this quarter. Our new relationships are with well-established sponsors like Shorenstein and Northwood that have come to appreciate that we can provide a broad array of capital solutions. We continue to efficiently deploy the capital that is available to us, including fully deploying the capital from our June equity offering at a consistent weighted average ROE in the low double digits. In the third quarter, we originated three loans for $282 million secured by Class A LEED Gold Certified Office properties with desirable amenities, reflecting the relative value that we are currently seeing in certain assets. These loans were in our target markets, which include regions with strong demographic growth engines like e-commerce and technology, or are linked to national universities. All of these loans were for new acquisitions at post-COVID valuations to well-established institutional sponsors with strong track records. Our robust activity is continuing into the fourth quarter with a deep pipeline of diversified loans. As a result, we expect to remain fully deployed through year end, which should support our earnings. Our originations pipeline reflects the relative value that we are finding across the spectrum, from larger loans with top sponsors to efficiently partnering with nimble sponsors on portfolios of loans in thematic investments where the macro tailwinds are significant. Good examples of these loans would be self-storage and industrial-related assets. While continuing to target opportunities in the Sun Belt and states benefiting from tax migration, we are seeing opportunities in gateway cities where values in certain sectors have reset lower. These cities are now attracting strong capital positions out of the equity side, And given our limited exposure to these areas pre-COVID, we can provide moderate leverage at these reset values at attractive targeted returns. Our loan book continues to be well-positioned with approximately 98 percent invested in senior floating rate loans and approximately two-thirds of our loans collateralized by multifamily, office, industrial, and self-storage properties. We continue to be underweight hotels and retail exposures. and the credit quality of our portfolio remains stable. Before I turn the call over to Tasek to discuss our financials in further detail, I want to note that we declared our regular $0.33 per share quarterly dividend and our $0.02 per share supplemental dividend in the fourth quarter. We expect to more than fully cover both our regular and supplemental dividends from our distributable earnings for the full year 2021. With that, I'll now turn it over to Tasek.