ACRES Capital

ORIGINATOR PROFILE

ACRES Capital (“ACRES”) is a New York-based private investment firm that provides debt capital solutions for the commercial real estate industry on a nationwide platform. ACRES is also a SEC registered investment advisor, a link to their Form ADV can be found here. ACRES is comprised of experienced real estate executives with a skill for identifying quality real estate assets and executing on the origination, structuring, underwriting and asset management of complex real estate investments. ACRES’ principals are entering their 16th year of investing in middle market real estate and executing on consistent strategies, and their highly-qualified structured finance team have successfully managed public REIT portfolios and credit in all segments of the market cycle.

ACRES provides commercial real estate financing solutions to commercial property owners in need of debt capital to acquire, refinance and/or enhance properties, portfolios or notes. ACRES seeks out investment opportunities with economic upside and sound fundamentals, often requiring creative and unique structures, while maintaining solid credit quality within our commercial real estate portfolio.

ACRES is not a programmatic commercial real estate lender. Potential investments need not fit into “boxes”, rather a rigorous deal screening process will allow for the true discovery of solid value creation opportunities on a deal-by-deal basis. ACRES’ opportunities come from those real estate investments that are ignored by traditional lenders due to stringent standards imposed by internal and external regulations.

Acres Capital invests on behalf of institutional clients, family offices, individuals and its own balance sheet. Acres currently has over $750M of capital and commitments.

Origination Process

Originators in target markets (Southeast, Midwest, Northeast and West Coast)
Leverages significant repeat and referral transaction volume
Executive team with over 2,000 transactions closed in the last 15 years

Underwriting Process

Loans structured to mitigate risk (guaranties, holdback reserves, milestones, etc.)
Rigorous in-house financial, industry, legal and business diligence
Third-party reports (appraisals, engineering, environmental, insurance, etc.)
Outside legal counsel overseen by internal General Counsel

Asset Management Process

Weekly contact and quarterly visits with borrowers
Consistent reporting and monitoring
Rigorous collateral valuation, cash monitoring and anti-fraud protection
Investment professionals with deep workout experience

Reporting Process

Investment team has 24/7 access to asset management system
Monthly and quarterly performance summaries, portfolio snapshots and cash flow forecasts
Quarterly internal valuations with indecent third-party review
Annual audits to be conducted by a big four account firm

Portfolio Metrics and Performance

ACRES has originated 37 loans totaling more than $513 million in its five-year history. These loans have historically ranged from $5 to $50 million with an average loan amount of $14 million. The investments are across 10 different property types, including condominiums, multi-family housing, student housing, mixed-use properties, senior living, office, retail, residential, hospitality and RV Parks. The typical duration of a loan is 21 months.

The borrower of the loan is charged on average, an 8% - 13% annual interest rate with some upfront fees to cover the cost of diligence and appraisals. ACRES portfolio has an average going in loan-to-value ratio of 53%. There have been 8 borrower defaults in ACRES’ portfolio since inception accounting for 15.7% of the total amount originated. There are currently 4 loans in default in ACRES portfolio and 1 loan that is in foreclosure. Maintaining a low loan-to-value on its investments helps ACRES protect its investors’ principal and return in the situations where a loan’s performance deteriorates. As of September 2017, ACRES has not experienced any principal loss.

Management

Mark Fogel

President & CEO

Mr. Fogel founded ACRES in 2012. He previously served as EVP at UC Funding and as Head of Asset Management for Arbor Realty Trust, a NYSE publicly traded mortgage REIT with a current market capitalization of ~$350 million. He received a BS from the University of Delaware and an MS in Real Estate Development from NYU.

Andrew Fentress

Managing Partner, Capital Markets

Mr. Fentress previously co-founded Medley, a private lender in the US corporate market with over $5 billion AUM and served as a Managing Director at Napier Park in the Specialty Situation Group. Andrew graduated from Boston College and the University of North Carolina’s Kenan Flagler School of Business.

Marty Reasoner

Managing Partner, Origination

Mr. Reasoner previously served as a Partner in Creekside Investments, and prior to that spent 15 years playing in the National Hockey League. He graduated from Boston College as a First-Team All American.

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