Good afternoon, everyone. Welcome to the Ares Commercial Real Estate Corporation's Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded on Thursday, November 7th, 2024. I will now turn the call over to Mr. John Stilmar, Partner of Public Markets Investor Relations. Please go ahead, sir. Good afternoon, and thank you for joining us on today's conference call. In addition to our press release and the 10-Q that we filed with the SEC, we've posted an earnings presentation under the investor resources section of our website at www.arescre.com. Before we begin, I want to remind everyone that comments made during the course of this conference call and webcast, as well as the accompanying documents, contain forward-looking statements and are subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may, and similar such expressions. These forward-looking statements are based on management's current expectations of market conditions and management's judgment. These statements are not guarantees of future performance, condition, or results and involve a number of risks and uncertainties. The company's actual results could differ materially from those expressed in the forward-looking statements as a result of a number of factors, including those listed in its SEC filings. Ares Commercial Real Estate Corporation assumes no obligation to update any such forward-looking statements. During this conference call, we'll refer to certain non-GAAP financial measures. We use these measures as operating performance, and these measures should not be considered in isolation from or to substitute for measures prepared in accordance with generally accepted accounting principles. These measures may not be comparable to like-titled measures used by other companies. Now I'd like to turn the call over to Bryan Donohoe. Bryan? Thank you, John. Good afternoon, everyone, and thank you for joining our third quarter 2024 earnings call. I'm joined today by Jeffrey Gonzalez, our Chief Financial Officer, Tae-Sik Yoon, our Chief Operating Officer, as well as other members of the management and investor relations team. As we began discussing approximately two years ago at the beginning of the Fed's tightening cycle and entering the period of distress and uncertainty in the commercial real estate market, we set forth two primary goals. The first was to further improve our balance sheet flexibility and liquidity in order to address our higher risk-rated assets. The second goal was to prudently and expeditiously resolve those same assets and reinvest the resulting available capital to reshape our portfolio into more stable assets. With the more positive backdrop for commercial real estate and the progress we have made in positioning our balance sheet, we expect to accomplish our first goal by year-end and accelerate our second goal. Supporting this plan are the encouraging signs of improvement in the commercial real estate market, evidenced by increasing transaction activity and stabilizing to slightly increasing property values. We see strengthening fundamentals such as leasing velocity and future supply reductions as support for these values. While the office market remains challenged, we are beginning to see some signs of stabilization, and we are hopeful that we will see further progress moving forward alongside potential future rate cuts. For us, this overall more constructive market environment is supporting both our goals for the company. During the quarter, we reduced our risk-rated four and five loans by approximately 33%, or $157 million compared to last quarter. Our risk-rated four and five loans now account for 17% of our total loan portfolio at the end of the third quarter. The progress in reducing our risk-rated four and five loans during the third quarter was driven primarily by the resolution of two risk-rated five loans. The first was a full repayment of a $98 million risk-rated five Texas multifamily loan, where net proceeds were $6.5 million greater than our carrying value, net of the CECL reserve held against this loan. The second was a completed deed-in-lieu foreclosure of a $69 million risk-rated five North Carolina office loan, for which we incurred a realized loss that was in line with our prior quarter CECL reserve. It is worth noting that the North Carolina office loan was previously on non-accrual. By owning the property, we expect to earn a relatively attractive cash return on the asset at our carrying value. Our risk-rated four and five assets are down more than 40% since year-end 2023. During the third quarter, there were no new migrations into the risk-rated four and five loans. However, the $163 million Illinois office loan was downgraded from a risk-rated four to a risk-rated five. Despite the property being well-leased and the borrower supporting the asset to date, recent indications are that the borrower may not support the asset beyond the upcoming maturity in March of 2025. This revised view, alongside overall weak conditions for the office market, led us to change the rating of this loan. Shifting to the loans with a risk rating of three or lower, borrowers are continuing to support these underlying business plans by contributing $37 million in the third quarter, or $138 million in the past 12 months of capital as paydowns of loans, funding of reserves, capital expenditures, leasing expenses, purchase of interest rate caps, or other purposes. The improving CRE sentiment and overall rate dynamics are also driving greater liquidity in the sector and stronger repayments in our portfolio. To date, we received $340 million of repayments, with more than 75% of repayment volume received since the beginning of the third quarter. We expect further repayments to continue in fourth quarter and into the first quarter of next year. These repayment trends, the positive shift in market sentiment, and the progress we made in the positioning of the balance sheet should allow us to accomplish our goal of deleveraging the balance sheet and bolstering liquidity by year-end 2024. As we look into 2025, we believe our progress this year will position us to accelerate the resolution of our risk-rated four and five loans, enabling us to prove out book value and opportunistically reinvest repayments to reshape our portfolio. And with that, I'll turn the call over to Jeff, who will provide more details on our third quarter earnings and capital positions. This is Jeff's first call since being named CFO in September, so over to you, Jeff. Thank you, Bryan, and I'm excited for the opportunity to serve as the company's CFO. I look forward to working with you all over the coming months and years ahead. Turning to our results, for the third quarter of 2024, we reported a GAAP net loss of approximately $5.9 million, or $0.11 per common share. Our distributable earnings for the third quarter of 2024 was approximately $3.7 million, or $0.07 per common share, which includes a realized loss of $5.8 million, or $0.10 per common share, upon taking title to the North Carolina office property as REO that Bryan mentioned. The realized loss was in line with the CECL reserve level as of the end of the second quarter. Distributable earnings, excluding this $5.8 million realized loss, was $9.5 million, or $0.17 per common share for the third quarter. It is important to note that we received over $4 million during the quarter, or approximately $0.08 per common share, of interest payments in cash from loans that have been placed on non-accrual, and thus these payments were not reflected in our third quarter earnings. Our overall CECL reserve now stands at approximately $146 million, or about $8 million higher than the approximately $138 million reserve as of June 30th, 2024. This increase was due to a $21 million combined increase in reserves on existing loans held for investment, primarily driven by increases in reserves on two office loans. The $21 million increase was partially offset by a $13 million reversal of previous reserves associated with the conversion of a previously risk-rated five loan to REO and a better-than-expected outcome on the previously risk-rated five multifamily loan, which fully repaid in excess of our carrying value. The overall CECL reserve of approximately $146 million at quarter-end represents about 8% of the total outstanding principal balance of our loans held for investment. 87% of our total CECL reserve, or around $128 million, relates to our risk-rated four or five loans, representing approximately 40% of the $320 million in outstanding principal balance of risk-rated four and five loans held for investment. As Bryan mentioned, we have been focused on strengthening our balance sheet to maintain financial flexibility in order to support future loan resolutions and portfolio positioning. In the third quarter and into the fourth quarter, we continue to build our available liquidity. As of November 5th, 2024, our available capital, which includes $42 million of available but undrawn sources of financing, was $134 million, an increase of 11% compared to the second quarter. We also continued to drive further financial flexibility by reducing leverage in the third quarter. We reduced our financial leverage to $1.3 billion, down 8% from $1.5 billion last quarter. Our net debt-to-equity ratio, excluding CECL, declined to 1.8 times at the end of the third quarter, down from 1.9 times in the second quarter. To conclude, we declared a regular cash dividend of $0.25 per common share for the fourth quarter of 2024. The fourth quarter dividend will be payable on January 15th, 2025, to common stockholders of record as of December 31st, 2024. With that, I will now turn the call back over to Bryan for some closing remarks. Thanks, Jeff. We are proud of our accomplishments in the third quarter, and we believe we will end the year having achieved our goals with respect to strengthening our balance sheet and liquidity. Although there is still work ahead, we feel confident that we have positioned our company to execute across our most important goal of addressing our problem assets and seeing continued progress in the overall portfolio. We remain committed to maximizing shareholder value, particularly through our dividend strategy and the crystallization of book value. By doing so, we aim to enhance overall shareholder returns. As always, we appreciate you joining our call today, and we'd be happy to open the line for questions. Thank you. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one. If you find your question has been addressed, you may remove yourself from the queue by pressing star two. Once again, star one, please, for questions. We go first today to Rich Shane of J.P. Morgan. Hey, guys. Thanks for taking my question. Look, we're approaching an inflection point that the industry is starting to be able to dimensionalize the scope of defaults or certainly narrow the range of outcomes. Can you help us think about how long it will actually take to work through that? I n my mind, that's probably the most misunderstood issue. Yeah, I appreciate the question, Rick. O bviously, the virtuous cycle that exists in commercial real estate, where assets are developed and then mature and lease up and then move forward with more stable long-term financing, has been interrupted, as you cite, for the last couple of years, and we're starting to see that cycle accelerate for many asset classes with the backdrop we mentioned on the call, on the prepared remarks earlier about leasing velocity and rates. T he office market, which was such a large component of the overall real estate market historically, that's just taking longer and remains a little bit uncertain in terms of ability to predict, so what that is leading to is more extensions of credits, broadly speaking, for business plans that are taking longer. As you can tell, thematically, we've been trying to isolate those assets that are in focus for us, work with those borrowers towards an expeditious resolution, but also maintaining that relationship of debt versus equity and making sure that we remain in the priority seat. A little difficult to fully predict, but the signs have been more positive over the last couple of quarters, as you can see. Yeah. Look, the reality is that, to some extent, from your perspective, it starts with setting reserves that are appropriate that allow you to clear the market. And clearly, that's been something you guys have been working really hard on. A ppreciate it. Thank you, guys. Yeah, well said. Thank you. Thank you. We go next now to Steve Delaney at Citizens JMP. Hello, everyone. Thanks for taking the question. I noticed on page 12 of your deck that you had these three REO properties, two of them offices. The income yields look fairly decent, so it seems they have some leasing in place. Just curious on your strategy as far as the hold period. Do you have any of these listed for sale at this time? Yeah, I appreciate the question. And certainly, when we think about reasons for default, many times it is not necessarily always asset-related, but sometimes sponsor-related, fund life, and things like that. And potentially, some of that was the catalyst for these transfers. I'd say we would opportunistically look to exit these assets. O bviously, that's a goal of ours over the next period of time. But what makes it easier to be patient and find the right buyer and the right capital structure into finding that exit, it gets a lot easier with the yields that you see on this page. The instability of the rate market over the past, obviously, this week's been fairly volatile as well, but the movements over the past couple of years and the lack of liquidity in the sector has made us take a more patient approach to this to make sure that we're maximizing value, but we're getting paid along the way, as you can see here. Yeah. And I'll just add on top of that. Oh, please do. Sorry. Go ahead, Steve. Oh, no. I was going to move to another question, so if you wanted to add to that reply, because I have a second follow-up, another question. Yeah, I was just going to add on top of Bryan on that, just as evidence, most recently from the North Carolina office loan that we took back. You saw the stable cash flows that we disclosed can have a positive impact on our earnings. That loan was on non-accrual, so taking that back is going to be accretive to our earnings on a go-forward basis. And in this falling interest rate environment, it can be a benefit to have a property being on our balance sheet that's producing stable cash flows and not impacted by falling interest rates. Last thing, just to close it out, Steve, is that the office asset mentioned in California is held for sale currently. Oh, it is. Okay. Thank you for that. You had a payment, you had a loan payoff in the third quarter, but you had not, in the fourth quarter, excuse me, but you'd not accrued interest. And I read that you received $8 million of cash interest. Was that related, Bryan, to the property changing hands, a sale, and they had to clean you up? Hello? Yeah, what you're referring to is the number that we disclosed in our EP of $4 million of cash that we received this quarter on non-accrual loans. T hat's really the loans that we had on - sorry, go ahead. No, I hear you. Y ou said it was $4 million in the third quarter on loans on non-accrual, correct? Correct. I thought there was an $8 million of cash interest paid in the fourth quarter that you had not accrued at 9/30. At least I may have written it down wrong. Yeah, that number is $4 million. That's $4, not $8. Okay. Very good. Thank you for that. Appreciate the comment. Thank you. We go next now to Jade Rahmani at KBW. Thank you. Curious as to your thoughts on the Treasury market and if that has any implications for deals' ability to get financing to pay off. Some of them presumably would look to refinance stabilized into a fixed-rate loan. Do you see that as creating challenges for the portfolio potentially next year? Look, as we've touched, and it's a good question, Jade, and obviously a lot of volatility in that market, as I said earlier, this entire real estate market, or the majority of it, does rely on leverage, and the cost of that leverage impacts values like a gravitational pull to some degree. W hat we've seen is the capital flows have improved into our sector broadly. If you take the events of this week, the reduced regulation that is likely to come with the change in presidency and government may offset some of those factors that come from the cost of funding. I n the asset classes in which we are focused, largely speaking, if you think about multifamily and industrial, what this will lead to is certainly higher inflation of rents, as the supply picture, which was already muted going forward, will become more so. C ertainly, the cost of funds will be impactful, but the growth in those sectors should more than offset it. Thanks. And then just looking at the office portfolio, have you looked at the 2025 maturity profile and the loans that are not already risk-rated four or five, what the implications are for when those maturity dates come up? Yeah, as you'd expect, Jade, we're in constant dialogue with these sponsors across the entirety of the portfolio, but on the office assets in particular. And as I mentioned a little bit, what we're seeing is some improvement in leasing holistically throughout the office market, but there are business plans that are taking longer to achieve. W e'll work through those in due course, but at least seeing the fundamental backdrop for the office market improve at this time. And within the portfolio at Ares, is that a positive leasing trend translating? Are you seeing positive leasing in your own assets? Yeah, we're certainly more conversations, more interest level. Obviously, the difficulty is translating these leases, the discussions into actual leases, but we've seen positive migration there. Thanks a lot. Thanks, Jade. Thank you. We go next now to Doug Harter at UBS. Thanks. I know you guys already declared the 4Q dividend, but how are you thinking about your comfort in the dividend with the current level of earnings, excluding losses? Yeah, it's a good question. I'll share the mic with Jeff and potentially Tasik as well. A s we've covered in the past, that's something that we discuss with the board regularly. And the form of returns to investors can take a lot of different channels, with that dividend being one of them. The liquidity profile that we discussed in our prepared remarks allows us that flexibility, which we think is a positive. And then we certainly think through the earnings power of the company and the portfolio over a longer period of time. But Jeff, feel free to add any color there. Yeah. No, I'll just add on top of that. The priority of our board has always been to enhance shareholder returns. It is a quarter-by-quarter analysis, and we're looking at our balance sheet position, which we've created, has provided optionality and flexibility for us when it comes to our dividend policy, but yeah, we're looking at the future of the real estate markets, what's going on in that, but we're continuing to evaluate on a quarter-by-quarter basis and make the best decision as far as returns for our shareholders, which we've consistently done, and our goal is always to provide as stable of a dividend as possible. Great. Thank you. Thank you, and just a quick reminder, ladies and gentlemen, please press star one for any questions today. We'll go next now to Eric Hagen of Bank of America. Hi, everyone. I wanted to ask about your view on the portfolio and the three risk-rated buckets. Good to see no negative credit migration. We're just curious about your thoughts on that. Do you feel like you have everything fenced in, or are there any specific assets that we could see a little bit more of a negative migration in the coming quarters? Yeah, it's a fair question. W hat we attempt and what we've done in the past is to do our best to ascertain exactly what we're seeing on the ground and in conversations with these sponsors. I f we've learned anything as an industry over the last 24 months, I don't think it's a never-say-never approach. But based on what we're seeing broadly, we feel we've encapsulated many of the risks in the portfolio, and the backdrop has been more positive and more accretive to real estate owners. T hat gets passed through to the loan portfolio as well. A s you'd expect, constant dialogue with each of these sponsors around where they sit. But we've seen certainly fundamentals improve across the board, and we did our best to describe that throughout the earnings presentation. Okay, great. Yeah, that's good to hear. And then my other question was just about the deployment outlook. It sounds like maybe a first half of 2025 story, if I was understanding the prepared remarks correctly. I was curious about timing on building out the pipeline and then when you could really see the origination start to pick up. Is there a several-quarter lag, or are you guys already starting to build up a pipeline now? J ust a timing question on when we'll see originations pick up again. Absolutely. We've been very active throughout our broader real estate lending book. Obviously, ACRE has not to date participated in that. But the engine's been running where we've seen throughout the third quarter, north of $3 billion of originations for the platform, which is more than 2x where we sat last year at the same time, and really don't see that pace slowing down anytime soon. T he team has been very active building the pipeline that can and should be available for ACRE when the balance sheet and the rest of our positioning allows it to. But the market's been extremely constructive for capital providers like Ares. Good deal. All right. Thank you. Gentlemen, it appears we have no further questions today. Mr. Donohoe, I'd like to turn the call back to you, sir, for any closing comments. Yeah, I appreciate it. I just want to thank everybody for their time today. Certainly continue to appreciate your support of Ares Commercial Real Estate, and we look forward to speaking with you again on our next earnings call. Thanks, everybody. Thank you, Mr. Donohoe. Ladies and gentlemen, this concludes our conference call for today. If you missed any part of today's call, an archived replay of this conference call will be available approximately one hour after the end of this call through December 7, 2024, to domestic callers by dialing 800-839-1246 and to international callers by dialing 404.