Ares Commercial Real Estate (ACRE) Q4 2025 earnings summary

Executive summary

• 2025 was a transitional year with early macroeconomic uncertainty, but conditions improved as the Fed eased policy, stabilizing values and boosting transaction volumes.

• Reported a GAAP net loss of $0.9 million ($0.02 per share) for 2025 and a Q4 net loss of $3.9 million ($0.07 per share); distributable earnings loss of $6.7 million ($0.12 per share) for the year and $8.5 million ($0.15 per share) in Q4.

• Focused on reducing risk-rated 4 and 5 loans, decreasing office and OREO assets, and reshaping the portfolio through new investments.

• Achieved balance sheet flexibility with moderate leverage and over $100 million in liquidity.

• Declared a $0.15 per share dividend for Q1 2026, implying a 12% annualized yield.

Financial highlights

• Loan portfolio principal balance grew to $1.6 billion, up 24% from Q3 2025; total portfolio was $1.7 billion at year-end.

• Interest income for Q4 2025 was $23.7 million; full year 2025 was $97.6 million.

• Net interest margin for Q4 2025 was $7.7 million; full year 2025 was $32.4 million.

• $572 million in loan repayments collected during 2025.

• Book value per share was $9.26, including the CECL reserve.

Outlook and guidance

• Focus remains on resolving the five remaining risk-rated 4 and 5 loans, especially the large Chicago office and Brooklyn condo loans.

• Available capital of $110 million supports continued asset resolutions and new investments.

• Closed $150 million in new loan commitments after year-end 2025.

• Over 60% of FY 2025 commitments were co-invested with other Ares managed funds.

• Earnings trajectory may be uneven due to asset resolutions, but confidence in meeting dividend level is strong.