Cornerstone Real Estate Advisers has agreed to acquire the multifamily agency lender ACRE Capital Holdings for $93 million. The acquisition greatly expands the commercial loan origination platform at Cornerstone, nearly doubling the company’s multifamily loan portfolio from approximately $5 billion to $10 billion.
Scott Brown, global president and CEO of Cornerstone, said in prepared remarks that the acquisition will help the firm expand its lending capabilities into several asset types, including seniors housing, healthcare and especially affordable housing.
“The affordable housing segment of the marketplace is under-served, and acquiring ACRE Capital will allow us to meaningfully address the current and looming scarcity in affordable residential housing and increase lending to communities nationwide,” he said.
According to Cornerstone, the company has already provided debt financing and equity capital in excess of $3 billion into the affordable housing marketplace since 1995.
Of the roughly $5 billion ACRE Capital portfolio, approximately $4.4 billion of the unpaid principal balance us comprised of GSE and HUD loans. The company specializes in smaller balance loans, whereas Cornerstone has traditionally originated larger balance loans, starting at $15 million.
James Henderson, CIO of Cornerstone’s alternative investments group, will manage ACRE Capital within his group post-acquisition. Based in Plano, Texas, and operating in seven national offices, ACRE Capital has 106 employees, including 50 lending professionals.
Cornerstone is a global real estate-focused investment manager with $50.6 billion in global assets under management as of March 31, 2016. The firm’s current portfolio of equity and debt investments in the multi-family sector exceeds $9.5 billion.
ACRE Capital is a subsidiary of a subsidiary of Ares Commercial Real Estate Corporation, a publicly traded, leading global alternative asset manager with approximately $94 billion of assets under management as of March 31, 2016.