Cornerstone Real Estate Advisers, an asset manager owned by Massachusetts Mutual Life Insurance Co., agreed to buy ACRE Capital Holdings in a bet on multifamily loans.
Chief Executive Officer Scott Brown has been bolstering operations, increasing the assets under management to $50.6 billion at the end of March from about $45 billion when he was named CEO early in 2015. He hired Allstate Corp.'s Joy Winterfield and JPMorgan Chase & Co.'s Albert Yang last year.
"The acquisition of ACRE Capital expands Cornerstone's national commercial lending platform, further strengthening our relationships with multifamily borrowers, while providing access to other sectors including senior housing and health care," Brown said in the statement. "The affordable housing segment of the marketplace is underserved, and acquiring ACRE Capital will allow us to meaningfully address the current and looming scarcity in affordable residential housing."
ACRE Capital has 106 employees, and will be run by James Henderson, chief investment officer of Cornerstone's Alternative Investments Group, after the deal closes, according to the statement.
The transaction will give the seller increased "liquidity and available capital in order to invest accretively in self-originated and attractively structured commercial real estate loans and investments," Ares Commercial Chief Financial Officer Tae-Sik Yoon said in a separate statement. Ares Commercial is externally managed by a subsidiary of Ares Management.
Proskauer Rose was legal counsel for Ares Commercial. Cornerstone used Goodwin Procter and got financial advice from Kimberlite Group.
