ACRE

Ares Commercial Real Estate: It Can Still Get Much Worse for this 16.1% Yield

Members Mailbag: We received an inquiry from a member this week about ACRE (expected to announce earnings on Tues May 2nd). We believe that some investors view this particular mortgage REIT (ACRE) as an attractive contrarian opportunity, considering the shares are down big (-40% over the last year), the yield has mathematically grown to a tempting 16.1%, and it has a well known brand name attached to it (Ares). However, the commercial real estate market is terrible. We share comparative data points on over 100 big-dividend REITs (sorted by sub-industry), dig into some important details on ACRE, and then conclude with our opinion on investing.