CHICAGO-In the wake of Ares Management's takeover of locally based Wrightwood Capital, the firm has formed Ares Commercial Real Estate by bringing on more than 40 Wrightwood employees, including former CEO Bruce Cohen.
The new firm will be based here, with other offices in Dallas, Los Angeles, New York, Newport Beach and Washington, DC. Cohen will jointly lead the group as a senior partner, along with John Bartling, a senior partner and global head of real estate at Ares.
Cohen said in a statement that this is an excellent opportunity to grow the platform. “We believe this transaction benefits all of our stakeholders,” he said. Ares is a global alternative asset manager and investment advisor with $42 billion of committed capital under management. Wrightwood has made more than $3.9 billion in loans and investments since 2004.
Wrightwood has been a constant lender to the commercial real estate market. The firm’s most recent deals have been providing mezzanine financing for a $33 million student housing project for a venture of Los Angeles-based Icon Co. and locally-based Campus Acquisitions in Los Angeles,
All of Wrightwood’s commercial real estate assets and sponsored funds will be managed by the new group. Also, Ares will now take on Wrightwood’s designation as a general and special servicer.
Bartling said in the statement that the addition of Wrightwood brings the ability to address a significant and growing need for financing solutions in middle-market commercial real estate. He said the a company such as Ares can take meaningful market share from traditional lenders “who are under pressure to withdraw and/or are unable to adapt,” he said.
The middle market is generally described as assets with values ranging from $10-100 million. In addition to offering senior and subordinated debt products, ACRE also actively promotes the concept of the “unitranche” facility to the commercial real estate market. The unitranche structure is a blended senior plus mezzanine debt strip which seeks to enhance lender returns and also benefit borrowers with a single lender interface.
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