Ares Commercial Real Estate Corporation (NYSE:ACRE) Q4 2023 Earnings Call Transcript
Ares Commercial Real Estate Corporation (NYSE:ACRE) Q4 2023 Earnings Call Transcript February 22, 2024
Ares Commercial Real Estate Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Please stand by, your program is about to begin. [Operator Instructions] Good morning. Welcome to Ares's Commercial Real Estate Corporation's Fourth Quarter and Year End December 31, 2023 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mr. John Stilmar, partner of public markets, Investor Relations.
John Stilmar: Good morning and thank you for joining us on today's conference call. I'm joined today by our CEO, Bryan Donohoe, our CFO, Tae-Sik Yoon, and other members of the management team. In addition to our press release and the 10 K that we filed with the SEC. We have posted an earnings presentation under the Investor Resources section of our website at w. w. w. dot Aries, CO.com. Before we begin, I will remind everyone that comments made during the course of this conference call and webcast as well as the accompanying documents contain forward-looking statements 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 such 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 filing. Various commercial real estate assumes no obligation to update any such forward-looking comments during this conference call, we'll 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'd like to turn the call over to our CEO, Bryan Donohoe. Bryan?
Bryan Donohoe: Thanks, John. Good morning, everyone, and thank you for joining our fourth quarter 2023 earnings call. As I'm sure you are aware we continue to see higher interest rates, higher rates of inflation as well as certain cultural shifts such as work-from-home trends adversely impacting the operating performance and economic values of commercial real estate. This is particularly evident from many office properties. In addition, many properties requiring significant capital expenditures have been impacted by higher labor and material costs. And fortunately, we are not immune to these macroeconomic challenges and our results for 2023 and the fourth quarter are partially a reflection of these conditions. For the fourth quarter, we had a GAAP loss of $0.73 per common share, driven by a $47 million or $0.87 per common share increase in our CECL reserve, most of which is related to loans collateralized by office properties or a residential condominium construction project.
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