Good afternoon, everyone. Welcome to Ares Commercial 's Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded on Tuesday, August 5th, 2025. I would now like to turn the call over to Mr. John Stilmar, Partner of Public Markets Investor Relations. Please go ahead, sir. Thank you, and good afternoon, everybody. Thanks 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 have 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 expectation 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 on its SEC filings. Ares Commercial Real Estate assumes no obligation to update any such forward-looking statements. During this call, we will refer to certain non-GAAP financial measures. We use these as measures of operating performance, and these measures should not be considered in isolation from or as a 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 our CEO, Bryan Donohoe. Bryan. Thank you, John. Good afternoon, everyone, and thank you for joining us. I am also joined today by Jeff Gonzales, our Chief Financial Officer; Tae-Sik Yoon, our Chief Operating Officer; as well as other members of the management and investor relations team. During the second quarter, we continued to execute on our strategic objectives. We maintained a strong balance sheet, which has driven our progress addressing our risk-rated 4 and 5 loans and further reducing our office loans in the quarter. Importantly, the portfolio no longer includes loans collateralized by properties that are primarily used for life sciences. Given the progress we have made in narrowing the range of potential outcomes in our portfolio and having achieved our target balance sheet objective, we have begun investing in new and attractive loans. As we look forward, we expect origination activity to increase as we collect repayments and further address our risk-rated 4 and 5 loans and reduce our office loan holdings. Let me now walk you through the details of the quarter and lay the foundation for how we see these activities unfolding in order to drive higher levels of distributable earnings and dividend coverage. During the second quarter, we reduced our office loans to $524 million, a decrease of 10% quarter -over -quarter and a decrease of 30% year- over -year. This decrease was driven by repayments, active asset management, and the decision to accelerate resolutions. Across office loans, including our one rated 5 office loan, we saw improved leasing fundamentals and, broadly speaking, more positive capital markets around the sector, which may also impact the rate of resolutions. During the second quarter, we exited a $51 million office life sciences loan and took a $33 million realized loss, which was in excess of the prior quarter's CECL reserve. While we don't take any loss lightly, we believe the resolution of this loan creates greater stability in our portfolio. Reductions in federal funding for life science research led to further erosions in tenant demand and further elevated the supply-demand imbalance for life science properties. By exiting this loan, we removed significant unfunded commitments in the portfolio. The exit of this loan contributed to the 50% decrease in future funding commitments from $73 million in Q1 2025 to $36.5 million as of June 30th, 2025. We believe utilizing the strength of our balance sheet to exit the loan created greater certainty around our portfolio and allows us to get back to growth more quickly. We see this as an important advancement for the company as there are no remaining loans in the portfolio collateralized with properties that are primarily used for life sciences. We also changed the risk rating on an $81 million senior loan collateralized by an office property in Arizona to a risk-rated 4 loan from a risk rating of 3. While occupancy increased at this property during the quarter and the sponsor has historically supported the asset, the lease-up business plan is taking longer than expected, and with maturity coming up in October, discussions regarding an extension or modification with the sponsor are taking place. Let me now shift to our overall risk-rated 4 and 5 loans. As of June 30th, 2025, we had one risk-rated 5 loan and four risk-rated 4 loans, maintaining the same number of risk-rated 4 and 5 loans as we held last quarter. Notably, two of the five risk-rated 4 and 5 loans comprise 75% of the outstanding principal balance. The first of these two loans is our risk-rated 5 Chicago office loan with a carrying value of $146 million. Occupancy at this property is stabilized and remains above 90% with a weighted average lease term of more than eight years. Post-quarter end, the positive momentum at the property continued as a significant tenant amended and extended its lease, resulting in a $3 million payment to our borrower, upon which the borrower applied these proceeds to reduce the principal balance of the loan. While we continue to see positive momentum towards the business plan, we note that challenges remain in the office sector with respect to the depth of investor demand, financing availability, and thus valuations for office properties. The second of the two largest risk-rated 4 and 5 loans is our risk-rated 4 Brooklyn, New York residential condominium loan with a carrying value of $113 million. This property continues to hit development milestones on budget with nearly all of the remaining necessary materials to complete construction procured, which mitigates supply chain and known tariff risks. Subsequent to quarter end, the soft marketing launch began at the property, while the formal marketing and sales process is targeted to begin by 4Q 2025. Beyond these areas of focus in our loan portfolio, our risk-rated 1 - 3 loans, which are primarily collateralized by multifamily, industrial, and self-storage properties, continue to perform well with strong overall execution of business plans. Specifically, during the second quarter, we upgraded a risk-rated 3 $56 million loan collateralized by a hotel property to a risk-rated 2 loan based on positively trending occupancy and operating cash flow levels. Beyond this positive risk-rating upgrade, we believe the overall loan portfolio is much improved over recent quarters. Further, our balance sheet is positioned to both drive additional resolutions as well as invest our capital in new loans. To this end, following the end of the second quarter, we successfully executed our first investment commitments of the year. We closed four senior loans totaling $43 million in loan commitments collateralized by self-storage properties. While this marks our initial deployment into new loans in 2025, the overall Ares debt business has remained actively engaged in the real estate market with a strong and growing pipeline of opportunities. In the past 12 months, the team has originated over $6 billion of new investment commitments, primarily focused on mixed-use, industrial, and multifamily assets. Supported by the scale and reach of the broader Ares Real Estate platform, we expect origination activities to build in the third quarter and in future periods. While it is hard to predict timing, over the next 12 months, we expect the portfolio to be equal to or larger than it was as of 2Q 2025. From an earnings standpoint, we recognize that 2Q 2025 distributable earnings, excluding losses, of $0.09 per share is below our dividend level of $0.15 per share. However, we remain confident that our earnings potential is in excess of the current dividend level. Our confidence in our earnings potential is derived from a number of levers that we can pull to enhance earnings, including the resolutions of our higher risk-rated assets, redeploying our additional capital, and making new loans. Looking ahead, we recognize that results may be uneven quarter to quarter, but our strategy remains clear, our execution purposeful, and our outlook optimistic. Through our deliberate actions, we remain focused on accelerating resolutions on our higher risk assets while not jeopardizing the integrity and strength of our balance sheet as we seek to clarify and demonstrate book value as quickly as possible. Ultimately, these actions and our return to investing in today's attractive environment should collectively begin to methodically rebuild our earnings in future periods. I will turn the call over to Jeff, who will provide more details on our second quarter results. Thank you, Bryan. For the second quarter of 2025, we reported a GAAP net loss of approximately $11 million or $0.20 per diluted common share. Our distributable earnings for the second quarter of 2025 were the net loss of approximately $28 million or $0.51 per diluted common share. This includes the impact from the realized loss of $33 million or $0.60 per diluted common share related to the exit of a Massachusetts office life sciences loan. Distributable earnings for the second quarter excluding this loss was approximately $5 million or $0.09 per diluted common share. During the quarter, we also collected $3 million or $0.05 per diluted common share of cash interest on loans that were on non-accrual and was accounted for as a reduction in our loan basis. In the second quarter of 2025, we collected an additional $30 million of repayments, bringing the year-to-date total repayments to $337 million, nearly 3x the amount of repayments in the first half of 2024. The acceleration of repayments that began in the second half of 2024 and which has continued through the first half of 2025 have bolstered our liquidity position and further strengthened our balance sheet. While these repayments are having an impact on our near-term earnings, we believe our strengthened balance sheet provides us the flexibility to accelerate resolutions and opportunistically deploy capital into new loans. Reinforced by the repayments and purposeful execution, we maintained the financial flexibility and balance sheet positioning we achieved in the first quarter. We maintained our net debt-to-equity ratio, excluding CECL, at 1.2 x at the end of the second quarter, stable quarter- over -quarter, but down from 1.9 x year -over -year. We reduced our outstanding borrowings further to $889 million at the end of the quarter, a decrease of 6% quarter -over -quarter, and a decrease of 39% year -over -year. In addition, we reduced our unfunded commitments to $37 million at the end of the second quarter, a decrease of 50% quarter- over -quarter, and a decrease of 58% year -over -year. Furthermore, we took proactive steps to further optimize our financial flexibility and capital structure. During the second quarter, we amended and extended our Morgan Stanley facility to reduce the current commitment to $150 million, but we have a built-in $100 million accordion option to increase the commitment to the previous size of $250 million. The reduced near-term commitment size with consistent terms allows us to more efficiently size our financing for our near-term needs while the accordion supports growth as it comes to fruition. During the second quarter, we continued to focus on maintaining our liquidity position. As we have discussed in the past, we believe this continued focus on liquidity enables greater optionality to accelerate resolutions and opportunistically invest, both of which will have a positive impact on earnings. Our liquidity position, as measured by available capital, was $178 million as of June 30th, 2025. This includes $94 million of cash. Turning to our CECL reserve, the total CECL reserve declined to $119 million as of June 30th, 2025, a decrease of approximately $20 million from the CECL reserve as of March 31st, 2025. This reduction was due to the exit of an office life sciences loan, loan repayments, and other loan-specific attributes. The total CECL reserve at the end of the second quarter of $119 million represents approximately 9% of the total outstanding principal balance of our loans held for investment. 94% of our total $119 million CECL reserve relates to our risk-rated 4–5 loans or $112 million. Overall, the $112 million of reserves represent 27% of the outstanding principal balance of risk-rated 4–5 loans held for investment. Our book value of $9.52 per share includes the $119 million CECL reserve. Our goal is to continue to prove out book value over time and, as Bryan stated, to enhance earnings and our dividend coverage. To conclude, the board declared a regular cash dividend of $0.15 per common share for the third quarter of 2025. Third quarter dividend will be payable on October 15th, 2025, to common stockholders of record as of September 30th, 2025. At our current stock price on July 31st, 2025, the annualized dividend yield on our third quarter dividend is above 13%. With that, I will turn the call back over to Bryan for some closing remarks. Thanks, Jeff. As we sit here today halfway through 2025, we are proud of our progress and accomplishments. While we recognize that quarter-to-quarter earnings results may vary, our conviction remains firm and our strategy remains unchanged. The success and conviction of our strategy is evidenced by record low leverage, high levels of liquidity, double-digit decreases in our risk-rated 4 and 5 loans and office portfolio over the last year, and ACRE's 3Q 2025 return to new loan investing. We believe that this is the first of many investments as we reshape ACRE's portfolio for future growth. We believe that the power of the Ares platform and the greater Ares Real Estate team provides us with the right people, comprehensive capabilities, and robust pipeline to continue to execute upon this strategy. Looking ahead, we're encouraged by the signs of stabilization and gradual improvement of the commercial real estate market, particularly driven by valuation stability due to the lack of new inventory in certain property types and submarkets. Through consistent execution, we are confident that ACRE is on the right track to drive shareholder value and benefit from the secular growth of the non-bank commercial real estate lending opportunity. In closing, we would like to take a moment to extend our deepest sympathies to the families of those who lost their lives during last week's tragedy at 345 Park Avenue. In times like these, we are reminded of the importance of standing together as a community with compassion, resilience, and support for one another. We are keeping all who have been affected in our thoughts. As always, we appreciate you joining our call today, and we'd be happy to open the line for questions. Thank you, Mr. Donohoe. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one. You can always remove yourself from the queue if your questions have been addressed by pressing star two. Once again, star one for questions. We go first to Rick Shane of JPMorgan. Hey, guys. Thanks for taking my questions. I'm curious. It sounds like from a balance sheet perspective, you feel like you've reached an inflection point, in terms of starting to deploy capital, working through the non-accruals. On a year-over-year basis, net revenue is down about 25%. Net interest income is down even more than that. Is the second quarter the trough, or should we expect that because of the timing, in the third quarter that it will be sequentially down again and then potentially start to rebuild from there? Thanks for the question, Rick. Yeah, we did reset our dividend in the first quarter to align with our strategic objectives. As you mentioned, we did reach our balance sheet positioning goals, which is allowing us to maximize some of the resolutions of our 4 and 5 rate loans and accelerate those and also begin to start investing in loans. As Bryan mentioned in his prepared remarks, we do expect to have the portfolio 12 months from now be at the level it's at today or higher. We do continue to source new loan opportunities, and we do expect to originate additional loans moving forward throughout the third quarter and in the fourth quarter that should absorb any repayment that happened. Does that imply if the balance sheet is going to be roughly the same size a year from now, but you're going to have presumably less drag from non-accruals, that even at a flat balance sheet you would expect to see net interest income start to rebuild from here? Yes, that's correct. Okay. Remind me, I know I've got it, and we'll see it in the transcript, but what was the drag this quarter from non-accruals on NII? The drag is about $0.17. Okay. In absolute dollars, I apologize. Absolute dollars, it's in the $8 million–$9 million range. Okay. Terrific. Thank you so much. Thank you. We go next now to Tom Catherwood at BTIG. Thanks. Bryan, I appreciated your comments on the origination activity increasing going forward and that it's likely to track repayments and watch list resolutions. Given your low debt levels, you could lever up that equity as it comes back from repayments and really ramp originations beyond even past the repayment levels. Is that your plan as you're looking out to originations for the rest of 2025? Yeah, I appreciate the question, Tom. I think certainly, if you look at what Jeff walked through in terms of the accordion feature of the Morgan Stanley facility, I think that represents the fact that, as you note, there is more leverage available than what we have sought to utilize on our balance sheet. Yes, there is the opportunity to lever up, as you put it. I do think the earnings power will be reflective of what we try to reflect is a market that we think is constructive for whole loan originations and certainly a constructive market for repo or warehouse line debt against those assets. We feel good about both the gross deployment and the net interest margin that we could create based on that borrowing even on a static level or increasing it, as you said. Got it. Appreciate that. If we think of just your origination pipeline as it's shaping up now, obviously, you put the money to work with the self-storage loans thus far in 3Q, but how's that pipeline shaping up for the rest of 2025? Yeah, we walked through a lot of what we've done on a platform basis, and I think that should be reflective of the fact that we feel we are in a strong standing position in this market as we think about non-bank lender participation continuing to increase. I think our presence in the market has improved over the past five, six years, right? I think we have a robust market to originate into. One thing I'd note is I think there's been so much volatility in rates. It's interesting. If you look at the first half of the year and look at Treasuries, we kind of ended up where we started, but with intraday volatility that was fairly historic. I mention that because I think the real estate industry is still kind of coming to grips with these higher rates to some degree. I think it's to the benefit of the lending community over equity on some basis. Deal velocity is coming back, but it ebbs and flows. I just reflect that, but I do think that the pipeline has been consistent for us throughout the year, and that's a function of being able to refinance versus needing those willing buyers and sellers to consummate that transaction. Long-winded answer, Tom, but we feel good about the pipeline as we sit here today. Appreciate that, Bryan. Last one for me on the Chicago loan. I know given that occupancy is above 90% and you received a $3 million paydown in Q3, is there consideration to extending the loan beyond, obviously, what was the July maturity and then putting it back on accrual, or is there something else that's keeping that at a 5 risk rating? Yeah, with respect to the asset itself and our business plan, our interaction with the borrower, certainly we'd like to keep our borrowers in their seat as the equity owner. I think you can read through what we described and think about this being a mid to high single-digit yield. I think that cash flow profile provides a lot of different options for us as we attempt to resolve it. I think we've reflected over prior quarters we'd like to move on from it. We want to make sure that market value reflects the intrinsic value that we see in this asset as well. The cash flow profile provides us those opportunities. I think we mentioned in the prepared remarks the fact that there's still stress from a valuation perspective around office assets generally. While I don't see a pathway to returning it to accrual, we do think that the yield from this asset is such that we do have options available to us as we go through the next few months. Got it. Appreciate all the thoughts. Thanks, everyone. Thank you. We'll go next to Jade Rahmani of KBW. Thanks very much. There's a ton of economic noise right now, and we're all trying to assess potential risks due to tariffs and other uncertainties. At the same time, one of your peers characterized the CRE lending market as frothy. I think I saw a GSE multifamily quote spread inside of 100 basis points on stabilized multifamily. Just curious your read of the landscape and what your views are about real estate fundamentals, if you're seeing any deterioration in performance across the Ares platform, if your view is that things are kind of stable, and also a comment on the health or competitiveness of the CRE lending markets. Yeah, it's a great question, Jade, and obviously one we ponder most days here as investors in the sector. I would say that we've seen some relative stability, as I mentioned in Tom's question, as rates have kind of coalesced where they've ended up here. I think you've got what's being printed today in terms of relatively stagnant markets from a leasing and fundamental perspective in certain asset classes, but with the forward supply-demand balance in multifamily, industrial, and self-storage that are kind of evolving from, I'd say, yellow towards green over the next 24 - 36 months. I think while today we have a little bit of a muted growth story, or at least maybe said differently, it's difficult to predict where the drivers of growth will come from in certain asset classes. I think over the next three to five years, you can make a case for that supply-demand imbalance leading to higher rent growth than we're seeing currently, right? In terms of your question on the debt markets, I think you've had a consolidation in the sector where banks have changed the way they participate in the market to some degree. I think you're seeing the larger participants probably take market share from some of the smaller. To the extent you're referencing a tightening or a frothy lending market, I think it depends on your perspective. I think we're finding plenty to do with ROEs that would be in keeping with our subject sector from a historical perspective, and I'm sure our peers would say similar. Also, something that is a very attractive return on equity from any market participant across debt and equity, right? The current income profile of lending today, historically referenced, I find to be still very attractive, as we've also seen a reset in asset values, right? Your attachment point to these properties is lower than it would have been two, three years ago, and I think you have to take that into account as you think about the relative value in our sector versus other real asset type categories. Hopefully that answered your question, but happy to delve further if helpful. Yeah, that's great. Exactly what I was looking for, and I think what you put forth is well-reasoned, balanced, as always. Can you comment on multifamily trends you're seeing? I think we've seen some mixed reports from the apartment REITs depending on their Sunbelt exposure. Curious as to your views on the multifamily space. Yeah, you know, Jade, it's something that, again, I'd say echoes what I said in terms of the forward supply versus demand being in favor of rent growth. In the immediate case, the data sometimes can be difficult to digest, right? A lot of the CPI data is based on, I'd characterize as more local mom-and-pop type landlords, in which case there's probably a lot of loss to lease still in those rent rolls, and you're seeing renewal rents outpace the degree of rent increases for new tenants. I think we're in a digestion phase. I would say that it is very market to market and asset to asset in terms of underlying performance. I do feel like we've departed the stage where most owners are going to give up their right or their option to continue in their standing, if you will, right? If you have an asset that might be over-levered that you purchased in early 2023 by way of example, I think you've kind of made that option payment. You've cured a lot of debt service that you didn't anticipate paying due to higher rates. At this point, you're looking over the next 24 months to a more constructive environment for rents. Obviously, the proof will be in where those rents ultimately get. I don't think we're returning to a 5% - 7% rent growth market, but I think CPI plus would be reasonable based on the statistics that we are seeing. I'd echo what I said earlier, the reset of basis for new loans against those assets, I think, is very, very attractive. Thanks for taking the questions. Thanks, Jade, as always. Thank you. We go next now to Doug Harter of UBS. Thanks. Can you talk about your thought process and whether you considered repurchasing stock at the current discount to book dividend yield versus deploying that into new loans, and what you thought about those trade-offs? Yeah, absolutely, Doug. It's certainly a fair question, and we consider repurchases, and the quantitative impact is fairly linear, right? We certainly get it. Right now, we're in favor of investing in new loans as we try to reposition this portfolio and bring us back to scale and deployment and really recharacterize the book, which we think over the long term will be rewarding for our shareholders. Beyond that, I think there's the practical size of our company, which we have to consider, those expense efficiencies. The scale of the portfolio I mentioned and how we finance that portfolio will benefit from parts of that scale. Other factors come into play like covenants and prospects for our growth. It's a tool that we have access to. We understand the quantitative aspects, but a little bit more goes into it before we would execute there. Great. That makes sense. Thank you. Thank you. Just a reminder, ladies and gentlemen, any further questions today, please press star one at this time. We'll go next to Chris Muller of Citizens Capital Markets. Hey, guys. Thanks for taking the questions. Can you walk me through the mechanics of the $33 million realized loss and the CECL release with $33 million loss on a $51 million loan and about a $20 million release? I think you guys said that you sold or the property was sold below your reserve basis. I'm just trying to understand how all that fits together. Yeah, thanks for the question, Chris. As you saw, there was a $33 million gross loss. In our earnings presentation, we broke out what the impact was that we had on the reserve there. A $19 million reserve. The net difference that was affecting book value this quarter and that's running through GAAP earnings would be $14 million. Is the right way to look at that is that $51 million loan was fully reserved for, and then it was sold for like $33 million? It was a $19 million reserve on a $51 million loan. Okay. Maybe we can take this offline later and dig a little bit deeper. I guess the other question I have here, you guys talked about how the top two loans, I think you said, were 75% of that problem loan bucket. Should we expect new originations going forward to be smaller in size? It looks like the dynamic with third quarter originations is exactly playing out like that. Just curious how you guys are thinking about loan sizing on new originations going forward. Yeah, it's a good question, Chris. I think that a couple of factors to take into account there. One, with respect to the originations post-quarter end, self-storage assets are generally going to be smaller in nature. I think structurally, we've also grown the rest of our platform such that we have a broader array of origination opportunities and capital sources in front of us today. We have the potential to maybe split loans between those vehicles. I think what that should lead to is better diversification while continuing to target the institutional borrower set, institutional assets throughout the U.S. I think the average ticket that goes into AC RE will likely come down to some degree, but we will maintain a bias towards the institutional asset class. Got it. That makes a lot of sense. Appreciate you guys taking the questions. Thanks, Chris. Thank you. It appears we have no further questions today. Mr. Donohoe, I'd like to turn things back to you, sir, for any closing comments. I appreciate it, sir. I just want to thank everybody for their time today. We appreciate your continued support of Ares Commercial Real Estate. We look forward to speaking with you all on our next earnings call. Thank you. 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 will be available approximately one hour after the end of this call through September 5th, 2025, to domestic callers by dialing one eight hundred six seven seven seven zero eight five and to international callers by dialing one four.