Cornerstone Real Estate Advisers, MassMutual's real estate subsidiary, is acquiring ACRE Capital Holdings, the mortgage servicing and commercial loan origination business of alternative investment manager Ares Management for $93 million in cash, representatives of both firms confirmed.
The deal is expected to close as early as the third quarter.
The acquisition of ACRE Capital will double Cornerstone's multifamily loan portfolio to $10 billion, said a Cornerstone news release.
Ares' real estate investment trust, Ares Commercial Real Estate Corp., bought ACRE Capital in August 2013. Since then, ACRE Capital has earned about $14.4 million in cumulative net income on its investment through March 31, according to an Ares press release.
“The acquisition of ACRE Capital is highly complementary to Cornerstone's long-standing industry leadership in multifamily lending and investment,” said James Henderson, chief investment officer of Cornerstone's alternative investments group, in a written statement. “Furthermore, the growth prospects in health care and senior housing are compelling.”
John Jardine, president and co-CEO of Ares Commercial Real Estate, said in a written statement: ”We are looking forward to redeploying the net proceeds into principal loans as we continue to see a growing opportunity set for commercial real estate owners.”