Ares Commercial Real Estate Corp. has agreed to acquire certain assets from the Alliant Co. for approximately $62.8 million through a combination of cash and stock that will expand its product offering to include government-insured loans.
Under the terms of the agreement Alliant Capital LLC is expected to become a wholly owned taxable real estate investment trust subsidiary of ACRE.
Alliant Capital Ltd., the affordable housing development financing branch of Alliant, is not included in the acquisition.
As of March 31, Alliant Capital LLC had a servicing portfolio of approximately $3.9 billion in multifamily loans with mortgage servicing rights as of Dec. 31, 2012 at a fair value of $61 million.
Alliant Capital LLC specializes in multifamily lending through the Fannie Mae Delegated Underwriting and Servicing program and operates origination, asset management and servicing platforms through 15 offices nationwide. For the five-year period ending Dec. 31, 2012, Alliant’s loan originations exceeded $600 million.
John Bartling, chief executive officer of Ares Commercial Real Estate Corp., explained that the transaction is “highly strategic” as it will enable ACRE to surpass “high barriers to entry into DUS lending.”
The transaction is expected to provide “incremental revenue growth.”
Alliant Capital LLC’s $3.9 billion servicing portfolio alone consists of approximately 1,000 loans that will help increase and diversify ACRE’s revenue stream “by adding more predictable servicing income,” Bartling said.
Overall, ACRE will be able to better meet “the short- and long-term financing needs” of the multifamily asset class, which has performed especially well in the past five years, he added.
Following the acquisition the ACRE board appointed Todd Schuster as co-CEO effective June 1.
