#1Ares Commercial Real Estate Corporation September 2020#2Disclaimer Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, which may relate to future events or the future performance or financial condition of Ares Commercial Real Estate Management LLC ("ACREM"), a subsidiary of Ares Management Corporation. ("Ares Corp."), Ares Corp., certain of their subsidiaries and certain funds and accounts managed by ACREM, Ares Corp. and/or their subsidiaries, including, without limitation, Ares Commercial Real Estate Corporation ("ACRE"). These statements are not guarantees of future results or financial condition and involve a number of risks and uncertainties. Actual results could differ materially from those in the forward-looking statements as a result of a number of factors, including the returns on current and future investments, rates of repayments and prepayments on ACRE's mortgage loans, availability of investment opportunities, ACRE's ability to originate additional investments and completion of pending investments, the availability of capital, the availability and cost of financing, imposition of margin calls or valuation adjustment events in connection with such financings, market trends and conditions in ACRE's industry and the general economy, the level of lending and borrowing spreads, commercial real estate loan volumes, the impact of COVID-19 and significant market volatility on ACRE's business, ACRE's borrowers, ACRE's industry and the global economy, ACRE's ability to pay future dividends at historical levels or at all, government-sponsored enterprise activity and other risks described from time to time in ACRE's and Ares Corp.'s filings within the Securities and Exchange Commission ("SEC"). Any forward-looking statement, including any contained herein, speaks only as of the time of this release and none of ACRE, ARES Corp. nor ACREM undertakes any duty to update any forward-looking statements made herein. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws. Ares Corp. is the parent to several registered investment advisers, including Ares Management LLC ("Ares Management") and ACREM. Collectively, Ares Corp., its affiliated entities, and all underlying subsidiary entities shall be referred to as "Ares" unless specifically noted otherwise. For a discussion regarding the potential risks and impact of the COVID-19 pandemic on ACRE, see Part I., Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operation" and Part II., Item 1A. "Risk Factors" in ACRE's Quarterly Report on Form 10-Q. The information contained in this presentation is summary information that is intended to be considered in the context of ACRE's SEC filings and other public announcements that ACRE, ACREM or Ares may make, by press release or otherwise, from time to time. ACRE, ACREM and Ares undertake no duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. These materials contain information about ACRE, ACREM and Ares, and certain of their respective personnel and affiliates, information about their respective historical performance and general information about the market. You should not view information related to the past performance of ACRE, ACREM or Ares or information about the market, as indicative of future results, the achievement of which cannot be assured. Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by ACRE or any other fund or account managed by ACREM or Ares, or as legal, accounting or tax advice. None of ACRE, ACREM, Ares or any affiliate of ACRE, ACREM or Ares makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. Certain information set forth herein includes estimates and projections and involves significant elements of subjective judgment and analysis. Further, such information, unless otherwise stated, is before giving effect to management and incentive fees and deductions for taxes. No representations are made as to the accuracy of such estimates or projections or that all assumptions relating to such estimates or projections have been considered or stated or that such estimates or projections will be realized. In addition, in light of the various investment strategies of such other investment partnerships, funds and/or pools, it is noted that such other investment programs may have portfolio investments inconsistent with those of the investment vehicle or strategy discussed herein. These materials may contain confidential and proprietary information, and their distribution or the divulgence of any of their contents to any person, other than the person to whom they were originally delivered and such person's advisers, without the prior consent of ACRE, ACREM or Ares, as applicable, is prohibited. You are advised that United States securities laws restrict any person who has material, non-public information about a company from purchasing or selling securities of such company (and options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. You agree not to purchase or sell such securities in violation of any such laws. These materials are not intended as an offer to sell, or the solicitation of an offer to purchase, any security, the offer and/or sale of which can only be made by definitive offering documentation. Any offer or solicitation with respect to any securities that may be issued by ACRE will be made only by means of definitive offering memoranda or prospectus, which will be provided to prospective investors and will contain material information that is not set forth herein, including risk factors relating to any such investment. This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Such information has not been independently verified and, accordingly, ACRE makes no representation or warranty in respect of this information. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. 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They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice. REF: RE-01401 2 ARES COMMERCIAL REAL ESTATE CORPORATION#3Ares Commercial Real Estate Corporation Real Estate Investment Trust with Broad Product & Extensive Credit Capabilities ①ARES COMMERCIAL REAL ESTATE CORPORATION Predominately Invested in Value-Add Commercial Mortgage Loans National direct origination platform and tenured management team Disciplined underwriting process supports highly selective approach Benefits from sponsorship by Ares Management, a leading alternative asset manager Diversified financing sources with match funded assets and liabilities Key Statistics / Track Record Diverse Balance Sheet Defensive Portfolio Positioning $1.8 billion outstanding across 50 loans, 95% senior loans (1) No liquid or marketable securities 62% of loan portfolio backed by multifamily, office and industrial properties Access to $200 million warehouse sponsored by Ares Management As of June 30, 2020, unless otherwise indicated. Borrowings diversified across 8 different sources of financing No capital markets mark-to-market provisions based on changes in market borrowing spreads; strong firmwide relationships with all warehouse lenders Stable liquidity position; consistent quarterly dividends to date(2) No credit losses since inception in 2012(3) 1. 2. Represents outstanding principal balance. Diversification does not assure profit or protect against market loss. Past performance is not indicative of future results. There is no assurance dividends will continue at these levels or at all. 3. Past performance is not indicative of future results. 3 ARES COMMERCIAL REAL ESTATE CORPORATION#4Overview of Ares Management With approximately $165 billion¹ in assets under management, Ares Management Corporation is a global alternative investment manager operating integrated businesses across Credit, Private Equity, Real Estate and Strategic Initiatives Profile Founded: AUM: Employees: Investment Professionals: Global Offices: Direct Institutional Relationships: Listing: NYSE- Market Capitalization:² Global Footprint³ 1997 $165bn¹ 1,410+ ~495 25+ 1,020+ ~$10.1bn The Ares Edge Founded with consistent credit based approach to investments 20+ year track record of compelling risk adjusted returns through market cycles Credit Deep management team with integrated and collaborative approach AUM $117.4bn Private Equity $26.6bn Real Estate Strategic Initiatives $14.4bn $6.9bn Real Estate Equity Ares SSG Pioneer and a leader in leveraged finance and private credit Strategies Direct Lending Liquid Credit Alternative Credit Corporate Private Equity Special Opportunities Energy Opportunities Infrastructure and Power Real Estate Debt Note: As of June 30, 2020. AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of Ares Capital Corporation and registered investment adviser. Information provided is as of June 30, 2020 and pro forma for Ares Management's acquisition of SSG Capital Holdings Limited ("SSG"), which closed on July 1, 2020. Past performance is not indicative of future results. Includes approximately $6.9 billion of AUM as of June 30, 2020 pro forma for the acquisition of SSG, which closed on July 1, 2020. 1. 2. As of September 1, 2020. 3. Ares has a presence in Sydney, Australia through its joint venture, Ares Australia Management Pty Ltd (AAM), with Fidante Partners Limited, a wholly owned subsidiary of Challenger Limited. Jakarta, New Delhi, Sydney and Bangkok offices are operated by third parties with whom Ares SSG maintains an ongoing relationship relating to the sourcing, acquisition and/or management of investments. 4 ARES COMMERCIAL REAL ESTATE CORPORATION#5Ares Real Estate Group Global real estate equity and debt platform that combines local relationships, differentiated market intelligence and deep property-level experience having invested across property sectors in the U.S. and Europe $14.4 Billion AUM¹ 14 Partners averaging 24 years of experience ~80 investment professionals Specialized Experience Across Property Types: U.S. Senior Debt Leading Platform of Real Estate Strategies U.S. & Europe Value-Add Multifamily Retail Industrial Hospitality Accolades² Office PERE Top 20 Real Estate Manager Based on 2015-20 Equity Raised Fitch Ratings Rated Special Servicing Platform 2016-2020 Credit U.S. Mezzanine Debt U.S. & Europe Opportunistic Equity Global Real Estate Platform with Local Reach New York London Amsterdam³ San Francisco Chicago Frankfurt Washington, D.C. Denver Paris Luxembourg Los Angeles Atlanta Madrid Legend Ares Real Estate Office³ Ares Real Estate Market Coverage Location4 Additional Business Infrastructure/Support Office Cycle-Tested Team & Results Access to Real-Time Property Market & Corporate Trends Disciplined Approach to Value Creation and Risk Mitigation As of June 30, 2020. Please see the Notes at the end of this presentation. 1. As of June 30, 2020. 2. The performance, awards/ratings noted herein relate only to selected funds/strategies and may not be representative of any given client's experience and should not be viewed as indicative of Ares' past performance or its funds' future performance. All investments involve risk, including loss of principal. 3. Includes Ares Management Corporation ("ARES") principal and originating offices where real estate activities take place. 4. In Madrid, Frankfurt, and Colorado, Ares Real Estate Group does not maintain a physical office, but has an investment professional dedicated to this market. 5. Non-Ares location providing administrative and support functions to the Ares Real Estate Group. 5 ARES COMMERCIAL REAL ESTATE CORPORATION#6Investment Process Overview We employ a disciplined investing process seeking to generate attractive risk adjusted returns for shareholders N • 28 investment professionals across 5 offices National Direct Origination Platform • Deep relationships with high quality sponsors • Strong understanding of industry dynamics and local markets Disciplined and Rigorous Underwriting Process Focus on strong property fundamentals, cash flows, loan to value and cost basis • Pursue commercial properties in liquid institutional markets with positive growth dynamics Fully Integrated Investment Committee Strong Asset Management Post Close • • Global investment committee comprised of senior management from debt and equity strategies • Cross-pollination of ideas and information • Robust portfolio management function with extensive workout capabilities • Rated Special Servicing Platform (2016 - 2020) (¹) Fitch Ratings As of June 30, 2020, unless otherwise indicated. The is no guarantee or assurance investment objectives will be achieved. 1. The performance, awards/ratings noted herein relate only to selected funds/strategies and may not be representative of any given client's experience and should not be viewed as indicative of Ares' past performance or its funds' future performance. All investments involve risk, including loss of principal. Please see the Notes at the end of this presentation. 6 ARES COMMERCIAL REAL ESTATE CORPORATION#7National Direct Origination Platform Broad capabilities combined with direct origination focus supports sourcing and structuring of attractive investments Direct Origination and National Market Coverage Why is Direct Origination Important? 1 Widens the funnel to provide larger deal universe East(1) $806 million West (1) $1.0 billion Midwest (1) $865 million Chicago, San Francisco, CA New York, NY 2 Increases control over structures and better economics Denver, CO Washington, D.C Atlanta, Los Angeles, CA Southwest (1) $819 million Southeast (1) 3 Enables proactive portfolio construction $1.5 billion ~28 investment professionals in the Real Estate Debt Group Legend (2) Ares Real Estate Debt Group Office and Coverage Location Ares Real Estate Debt Group Coverage Location Additional Business Infrastructure/Support Office Originated approximately $5.9 billion of real estate debt with no credit losses (1)(3) As of June,30, 2020, unless otherwise indicated. Diversification does not assure profit or protect against market loss. 1. Past performance is not indicative of future results. Map excludes $834 million of investment portfolios backed by properties located in multiple regions across the U.S. 2. Includes Ares principal and originating offices where real estate activities take place and coverage locations as of June 30, 2020. 3. Real estate debt originations (commitment balance) since inception through June 30, 2020. 7 ARES COMMERCIAL REAL ESTATE CORPORATION#8Focus on Quality Properties in Top Markets Targeted Investments and Investment Strategy ✓ Direct origination of primarily senior CRE loans Focus on top 50 MSAs in the U.S. ✓ Focus on major, liquid markets with positive market dynamics ✓ Extensive experience in wide range of property types with emphasis on opportunities to increase cash flows and minimize volatility Prioritize institutional-quality properties and sponsors Senior loans comprise the majority of the investment portfolio There is no guarantee or assurance investment objectives will be achieved. 8 ARES COMMERCIAL REAL ESTATE CORPORATION#9Illustrative Transactions of ACRE Originated Loans (1) Multifamily Multifamily Office Multifamily Mixed-use Multifamily Florida Florida Illinois New Jersey California Washington $46,689,000 Subordinate Loan $91,811,000 Senior Loan $37,556,000 Subordinate Loan $41,000,000 Senior Loan $39,621,000 Senior Loan $19,000,000 Senior Loan Industrial Multifamily Office Office Industrial Office New York Texas Various Illinois California Georgia B $56,500,000 Senior Loan $29,556,000 $132,567,061 $41,921,000 Senior Loan Senior Loan Senior Loan $26,622,000 Senior Loan $56,230,791 Senior Loan 1. The transactions presented in this section are shown for illustrative purposes only and are the twelve most recent ACRE transactions through June 30, 2020 but are not necessarily representative of all transactions of a given type or of investments generally and are intended to be illustrative of some of the types of investments that may be made by ACRE in regard to real estate private debt transactions. Such transactions are not necessarily representative of the investment opportunities that will be available to ACRE in the future. 9 ARES COMMERCIAL REAL ESTATE CORPORATION#10Total Loans Held for Investment Portfolio Key Statistics (50 Loans) Loan Portfolio Characteristics (4) Mid-Atlantic/Northeast ($ in millions) Total loan commitments Outstanding principal balance $2,058.8 $1,806.2 Southwest Weighted average unpaid principal balance of loan portfolio(¹) Percentage of floating rate loans based on outstanding principal balance Percentage of senior loans based on outstanding principal balance Weighted average remaining life of loan portfolio $1,889.9 12% 98% 95% 1.5 years Percentage of loan portfolio with LIBOR floor or fixed rate Weighted average LIBOR floor for floating rate loans with 96% Midwest 18% LIBOR floors 1.77% 10% Southeast 40% Unleveraged Effective Yield (2) West Loan Portfolio Self Storage 1% Residential/Condominium 20% 8% 7.2% 2% 6.9% 6.8% 6.6% 6.7% (3) Multifamily 25% Industrial 9% 6% 4% 2% Student Housing 10% 0% Q2-19 Senior loans 6.9% Q3-19 6.5% Q4-19 6.5% Q1-20 6.2% Q2-20 6.3% Sub. debt and Mixed-use 12% Office 28% pref. equity investments 14.7% 15.0% 15.1% 13.5% 13.6% Hotel 13% Note: As of June 30, 2020, unless otherwise noted. Past performance is not indicative of future results. Diversification does not ensure profit or protect against market loss. 1. During the quarter ended June 30, 2020. 2. Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held for investment by the Company as weighted by the outstanding principal balance of each loan. 3. Excludes impact of loans on non-accrual status as of June 30, 2020. Including non-accrual loans, total weighted average Unleveraged Effective Yield for total loans held for investment and senior loans would be 6.4% and 6.0%, respectively. 10 4. Based on outstanding principal balance. ARES COMMERCIAL REAL ESTATE CORPORATION#11Deep Sources of Funding Enhance ACRE's Portfolio Secured Term Loan, 7% Financing Sources Composition (1) Notes Payable, 4% . Ares Warehouse Overview $200 million+ Ares vehicle that resides outside of ACRE 2017-FL3 Securitization, 30% ($ in millions) Financing Sources Secured Funding Agreements Total Commitments(3) Secured Funding Agreements, 59% • Debt to equity ratio: 3.0x (2) Interest Rate • • Outstanding Balance . Wells Fargo Facility Citibank Facility CNB Facility U.S. Bank Facility Morgan Stanley Facility MetLife Facility Subtotal 500.0 325.0 LIBOR+1.45 to 2.25% LIBOR+1.50 to 2.50% $ 465.4 120.5 50.0 LIBOR+2.65% 50.0 186.0 LIBOR+1.65 to 2.25% 150.0 LIBOR+1.75 to 2.85% 180.0 LIBOR+2.10 to 2.30% $ 1,391.0 $ 39.2 117.2 84.5 876.8 Asset Level Financing Notes Payable $ 84.2 LIBOR+2.50 to 3.75% $ 56.2 Capital Markets Secured Term Loan 2017-FL3 Securitization 110.0 LIBOR+5.00% $ 110.0 445.6 LIBOR +1.70% 445.6 555.6 $ 555.6 Subtotal Total Debt 2,030.8 $ 1,488.6 Equity capital in the Warehouse is provided by Ares Management, with third party debt financing The Warehouse holds Ares Management originated real estate loans that are made available to ACRE and other Ares Management funds ACRE is not obligated to acquire the loans in the Warehouse Benefits to ACRE ✓ Allows ACRE to better match the timing of originations with repayments, which may result in more consistency of invested capital and improved earnings ✓ Maintains momentum of originations when available capital is limited ✓ Another example of Ares Management's support for ACRE Based on outstanding principal balance. As of June 30, 2020, unless otherwise indicated. 1. 2. 3. Excludes impact of current expected credit losses ("CECL") reserve. 11 Represents total commitments. Ability to draw on available capacity is subject to available collateral and lender approval. Dollars in millions of borrowing capacity. 0 ARES COMMERCIAL REAL ESTATE CORPORATION#12ACRE Highlights We believe ACRE is well positioned to navigate the current environment Defensively positioned portfolio Highly Experienced Team 1 3 . Diversified portfolio of primarily multifamily, office and industrial properties Significant experience managing through challenging times 2 • 95% senior loans; no liquid or marketable securities Well Capitalized Balance Sheet • •Total borrowings across 8 different sources Diversified composition of loans placed with each lender • No mark-to-market remargining provisions that are based on changes in market borrowing spreads • • Primarily match funded assets and liabilities •Improved relative cost of financing and warehouse facility with Ares Management extends capital flexibility 5 Fully integrated investment committee Robust portfolio management function with extensive workout capabilities Strong Track Record • • Originated approximately $5.9 billion of real estate debt with no credit losses (1) Historical record of consistent and growing dividends(2) Benefits from Ares Management Sponsorship Provides market insights from investments in over 2,600 companies and 200 properties in North America and Europe Enhances asset management capabilities Strong relationships with each of our warehouse lenders As of June 30, 2020, unless otherwise noted. Past performance is not indicative of future results. There is no guarantee or assurance investment objectives will be achieved. Diversification does not ensure profit or protect against market loss. 1. Real estate debt originations (commitment balance) since inception through June 30, 2020. 2. There is no assurance dividends will continue at these levels or at all. 12 ARES COMMERCIAL REAL ESTATE CORPORATION#13Appendix ARES COMMERCIAL REAL ESTATE CORPORATION#14ACRE Investment Committee Fully integrated debt and equity investment committee Bill Benjamin* Partner, Head of Ares Real Estate Group 34 years of experience Bryan Donohoe* Partner, Head of U.S. Debt, CEO of ACRE 20 years of experience Tae-Sik Yoon* Partner, CFO of Ares Real Estate Group, CFO of ACRE 27 years of experience David Roth* Partner, Head of U.S. Equity, President of ACRE 36 years of experience JB Gerber* Partner, Head of Real Estate Debt Origination 15 years of experience Kevin Cahill Partner, Portfolio Manager, Europe Equity 16 years of experience Jay Glaubach Partner, Portfolio Manager, U.S. Equity 22 years of experience Andrew Holm Partner, Portfolio Manager, U.S. Equity 15 years of experience Howard Huang* Partner, Portfolio Manager U.S. 31 years of experience Wilson Lamont Partner, Co-Head of Europe Equity 20 years of experience John Ruane Partner, Co-Head of Europe Equity 20 years of experience David Sachs* Partner, Strategy and Relationship Mgmt. Group 39 years of experience Sumit Sasidharan* Managing Director, Head of Capital Markets, Real Estate Debt 23 years of experience Julie Solomon Partner, Head of Product Management and Investor Relations, Real Estate 21 years of experience Steven Wolf Partner, CIO of U.S. Equity, Portfolio Manager 35 years of experience *Serves on the Real Estate Debt Investment Subcommittee that reviews deals under a certain threshold. 14 0 ARES COMMERCIAL REAL ESTATE CORPORATION#15Loans Held for Investment Portfolio Details ($ in millions) # Loan Type Office Loans: Location Origination Date Current Loan Outstanding Commitment Principal Carrying Value Interest Rate LIBOR Floor Unleveraged Effective Yield (1) Maturity Date Payment Terms (2) 1 Senior Diversified Jan 2020 $132.6 $107.9 $107.4 L+3.65% 1.6% 5.7% Jan 2023 I/O 2 Senior IL Nov 2017 82.0 69.6 69.5 L+3.75% 1.3% 5.6% Dec 2020 I/O 3 Senior NC Mar 2019 84.0 59.4 59.1 L+4.25% 2.4% 8.4% Mar 2021 I/O 4 Senior IL May 2018 59.6 57.3 57.2 L+3.95% 2.0% 6.3% June 2021 I/O 5 Senior GA Nov 2019 56.2 38.6 38.2 L+3.05% 2.0% 5.8% Dec 2022 I/O 6 Senior CA Oct 2019 37.2 31.1 30.8 L+3.35% 2.0% 6.0% Nov 2022 I/O 7 Subordinated IL Mar 2020 37.6 29.7 29.4 L+8.00% 1.5% 10.1% Mar 2023 I/O 8 Senior IL Dec 2019 41.9 28.0 27.7 L+3.80% 1.8% 6.2% Jan 2023 I/O 9 Senior CA Nov 2018 22.8 18.0 17.9 L+3.40% 2.3% 6.3% Nov 2021 I/O 10 Subordinated NJ Mar 2016 17.0 17.0 16.4 12.00% -% 12.8% Jan 2026 I/O 11 Senior TX Apr 2019 28.2 14.7 14.5 L+4.05% 2.5% 7.6% Nov 2021 I/O 12 Senior NC Apr 2019 30.5 13.3 12.7 L+3.53% 2.3% 7.7% May 2023 I/O 13 Senior NC Oct 2018 13.5 8.6 8.5 L+4.00% 2.1% 6.7% Nov 2022 I/O 14 Subordinated CA Nov 2017 3.1 2.9 2.9 L+8.25% 1.3% 9.7% Nov 2021 I/O Total Office $646.2 $496.1 $492.2 Multifamily Loans: 15 Senior FL June 2020 $91.8 $91.3 $90.6 L+5.00% 0.8% 6.7% Jun 2022 I/O 16 Senior TX Sep 2019 75.0 75.0 74.7 L+2.85% 2.0% 5.0% Oct 2022 I/O 17 Senior FL June 2020 46.7 46.2 46.0 L+5.00% 0.8% 6.6% Jun 2022 I/O 18 Senior FL Dec 2018 43.5 43.1 42.8 L+2.60% 2.4% 5.5% Jan 2022 I/O 19 Senior NJ Mar 2020 41.0 41.0 40.7 L+3.05% 1.5% 4.9% Mar 2022 I/O 20 Senior KS Oct 2019 35.8 35.8 35.5 L+3.25% 1.9% 5.5% Nov 2022 I/O 21 Senior NY Dec 2017 30.2 30.2 30.1 L+3.20% 1.4% 4.9% Dec 2020 I/O 22 Senior PA Dec 2018 30.2 29.3 29.2 L+3.00% 2.4% 5.9% Dec 2021 I/O 23 Senior TX Sep 2017 27.5 27.5 27.5 L+3.20% 1.2% 4.9% Oct 2020 I/O 24 Senior WA Feb 2020 19.0 18.6 18.4 L+3.00% 1.7% 5.1% Mar 2023 I/O 25 Senior SC Aug 2019 34.6 2.1 1.8 L+6.50% 2.2% 14.2% Sep 2022 I/O Total Multifamily $475.3 $440.1 $437.3 1. Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as weighted by the outstanding principal balance of each loan. 2. 1/0 = interest only, P/I = principal and interest. 15 0 ARES COMMERCIAL REAL ESTATE CORPORATION#16Loans Held for Investment Portfolio Details ($ in millions) # Loan Type Hotel Loans: Location Origination Date Current Loan Commitment Outstanding Principal Carrying Value Interest Rate LIBOR Floor Unleveraged Effective Yield(1) Payment Maturity Date Terms(2) 26 Senior 27 Senior OR/WA Diversified May 2018 $68.1 $68.1 $67.7 L+3.45% 1.9% 4.6% (3) May 2021 I/O Sep 2018 64.3 60.8 60.6 L+3.60% 2.1% 6.2% Sep 2021 I/O 28 Senior CA Dec 2017 40.0 40.0 39.9 L+4.12% 1.4% 5.9% Jan 2021 I/O 29 Senior MI Nov 2015 35.2 35.2 35.2 L+4.40% ―% 4.6% July 2020 I/O 30 Senior IL Apr 2018 32.9 32.9 32.6 L+4.40% 1.9% -% (4) May 2021 I/O Total Hotel $240.5 $237.0 $236.0 Mixed-Use Loans: 31 Senior FL Feb 2019 $100.6 $100.6 $100.2 L+4.25% 2.5% 7.8% Feb 2021 I/O 32 Senior CA Mar 2018 56.1 50.9 50.6 L+4.00% 1.9% 6.2% Apr 2022 I/O 33 Senior TX Sep 2019 42.2 34.7 34.4 L+3.75% 2.3% 6.7% Sep 2022 I/O 34 Senior CA Feb 2020 39.6 20.8 20.4 L+4.10% 1.7% 6.4% Mar 2023 I/O 35 Subordinated IL May 2018 15.5 15.5 15.3 L+12.25% 1.5% 14.5% Nov 2021 I/O Total Mixed-Use $254.0 $222.5 $220.9 Student Housing Loans: 36 Senior TX Dec 2017 $41.0 $41.0 $40.9 L+4.75% ―% 5.5% Jan 2021 I/O 37 Senior CA June 2017 41.0 39.7 39.7 L+3.95% 1.2% 5.2% July 2021 I/O 38 Senior NC Feb 2019 30.0 30.0 29.9 L+3.15% 2.3% 5.9% Feb 2022 I/O 39 Senior TX Dec 2017 25.1 24.6 24.3 L+3.45% 1.6% 5.5% Feb 2023 I/O 40 Senior AL Feb 2017 24.1 24.1 23.3 L+4.45% 0.8% -% (4) Aug 2020 I/O 41 Senior FL Jul 2019 22.0 22.0 21.8 L+3.25% 2.3% 5.9% Aug 2022 I/O Total Student Housing $183.2 $181.4 $179.9 1. 2. 3. 4. Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as weighted by the outstanding principal balance of each loan. I/O = interest only, P/I = principal and interest. At origination, the Oregon/Washington loan was structured as both a senior and mezzanine loan with the Company holding both positions. The mezzanine position of this loan, which had an outstanding principal balance of $13.1 million as of June 30, 2020, was on non-accrual status as of June 30, 2020 and therefore, the Unleveraged Effective Yield presented is for the senior position only as the mezzanine position is non-interest accruing. Loan was on non-accrual status as of June 30, 2020 and therefore, there is no Unleveraged Effective Yield as the loan is non-interest accruing. 16 ARES COMMERCIAL REAL ESTATE CORPORATION#17Loans Held for Investment Portfolio Details ($ in millions) # Loan Type Location Origination Date Current Loan Commitment Outstanding Principal LIBOR Carrying Value Interest Rate Floor Unleveraged Effective Yield(1) Maturity Date Payment Terms(2) Industrial Loans: 42 Senior FL Oct 2019 $52.5 $52.5 $52.1 L+6.10% 2.1% 8.8% Oct 2022 I/O 43 Senior NY Jan 2020 56.5 46.9 46.5 L+5.00% 1.6% 8.3% Feb 2021 I/O 44 Senior NC May 2019 40.5 34.8 34.6 L+4.05% 1.6% 5.9% Mar 2024 I/O 45 Senior CA Nov 2019 26.6 21.5 21.3 L+4.50% 1.9% 7.3% Dec 2021 I/O 46 Senior CA Aug 2019 19.6 13.2 13.1 L+3.75% 2.0% 6.3% Mar 2023 I/O Total Industrial $195.7 $168.9 $167.6 Residential/Condominium Loans: 47 Senior CA Jan 2018 $16.7 $13.1 $13.1 13.00% ―% 14.4% Aug 2020 I/O 48 Subordinated NY Oct 2018 16.2 16.2 16.1 L+14.00% 2.3% 18.0% May 2021 I/O 49 Subordinated HI Aug 2018 11.5 11.5 11.5 14.00% % 17.0% Oct 2020 I/O Total Residential/Condominium $44.4 $40.8 $40.7 Self Storage Loans: 50 Senior Total Self Storage FL Feb 2019 $19.5 $19.5 $19.5 $19.5 $19.4 $19.4 L+3.50% 2.0% 6.0% Mar 2022 I/O Loan Portfolio Total/Weighted Average $2,058.8 $1,806.3 $1,794.0 1.8% 6.4% 1. Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as weighted by the outstanding principal balance of each loan. 2. 1/0 = interest only, P/I = principal and interest. 17 ARES COMMERCIAL REAL ESTATE CORPORATION#18Consolidated Balance Sheets As of June 30, 2020 December 31, 2019 (unaudited) ASSETS Cash and cash equivalents $ 72,987 $ Restricted cash Loans held for investment ($525,817 and $515,896 related to consolidated VIES, respectively) 1,794,049 5,256 379 1,682,498 Current expected credit loss reserve (26,063) Loans held for investment, net of current expected credit loss reserve 1,767,986 1,682,498 Loans held for sale, at fair value 96,404 Real estate owned, net 37,693 37,901 Other assets ($996 and $1,309 of interest receivable related to consolidated VIES, respectively; $31,183 and $41,104 of other receivables related to consolidated VIES, respectively) 46,163 58,100 Total assets $ 2,021,233 $ 1,784,134 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Secured funding agreements Notes payable Secured term loan Collateralized loan obligation securitization debt (consolidated VIE) Secured borrowings Due to affiliate Dividends payable Other liabilities ($371 and $718 of interest payable related to consolidated VIES, respectively) Total liabilities $ 876,842 $ 728,589 54,819 54,708 109,588 109,149 443,467 443,177 47,533 3,217 2,761 11,072 9,546 9,569 9,865 1,556,107 1,357,795 Commitments and contingencies STOCKHOLDERS' EQUITY Common stock, par value $0.01 per share, 450,000,000 shares authorized at June 30, 2020 and December 31, 2019 and 33,441,937 and 28,865,610 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively 329 283 Additional paid-in capital Accumulated earnings (deficit) Total stockholders' equity Total liabilities and stockholders' equity 497,054 (32,257) 465,126 423,619 2,437 426,339 $ 2,021,233 $ 18 1,784,134 ARES COMMERCIAL REAL ESTATE CORPORATION#19Consolidated Statements of Operations ($ in thousands, except share and per share data) 6/30/2020 3/31/2020 12/31/2019 For the Three Months Ended 9/30/2019 6/30/2019 Revenue: Interest income from loans held for investment Interest expense Net interest margin Revenue from real estate owned 29,835 $ 31,448 $ 28,536 $ 28,269 $ 29,993 (13,042) (15,534) (15,044) (15,124) (16,675) 16,793 15,914 13,492 13,145 13,318 1,189 5,220 8,088 6,702 8,357 Total revenue 17,982 21,134 21,580 19,847 21,675 Expenses: Management and incentive fees to affiliate 2,152 1,773 1,959 1,578 2,252 Professional fees 660 903 641 542 532 General and administrative expenses 959 868 1,035 1,005 1,029 General and administrative expenses reimbursed to affiliate 1,038 1,051 764 831 771 Expenses from real estate owned 3,254 6,676 7,338 6,838 7,118 Total expenses 8,063 11,271 11,737 10,794 11,702 Provision for current expected credit losses (4,007) 27,117 Unrealized losses on loans held for sale 3,998 Income (loss) before income taxes 9,928 (17,254) 9,843 9,053 9,973 Income tax expense, including excise tax 160 9 183 Net income (loss) attributable to common stockholders 9,768 $ (17,263) $ 9,660 $ 19 9,034 $ 218 9,755 Earnings (loss) per common share: Basic earnings (loss) per common share $ 0.29 $ Diluted earnings (loss) per common share $ 0.29 $ (0.54) $ (0.54) $ 0.34 $ 0.32 $ 0.34 0.33 $ 0.31 $ 0.34 Weighted average number of common shares outstanding: Basic weighted average shares of common stock outstanding Diluted weighted average shares of common stock outstanding Dividends declared per share of common stock (¹) 33,316,933 33,539,580 31,897,952 31,897,952 28,640,363 28,872,975 28,634,514 28,867,603 28,599,282 28,863,765 0.33 $ 0.33 $ 0.33 $ 0.33 $ 0.33 1. There is no assurance dividends will continue at these levels or at all. 19 ARES COMMERCIAL REAL ESTATE CORPORATION#20Core Earnings Reconciliation The Company believes the disclosure of Core Earnings provides useful information to investors regarding the calculation of incentive fees the Company pays to its manager, Ares Commercial Real Estate Management LLC, and the Company's financial performance. Core Earnings is an adjusted non-GAAP measure that helps the Company evaluate its financial performance excluding the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative of its current loan origination portfolio and operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Core Earnings is defined as net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that any of the Company's target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), onetime events pursuant to changes in GAAP and certain non-cash charges after discussions between the Company's manager and the Company's independent directors and after approval by a majority of the Company's independent directors. ($ in thousands, except per share data) Net income (loss) attributable to common stockholders Stock-based compensation Incentive fees to affiliate Depreciation of real estate owned Provision for current expected credit losses Unrealized losses on loans held for sale Core Earnings Net income (loss) attributable to common stockholders Stock-based compensation Incentive fees to affiliate Depreciation of real estate owned Provision for current expected credit losses Unrealized losses on loans held for sale Basic Core Earnings per common share Net income (loss) attributable to common stockholders Stock-based compensation Incentive fees to affiliate Depreciation of real estate owned Provision for current expected credit losses Unrealized losses on loans held for sale Diluted Core Earnings per common share SS 6/30/2020 3/31/2020 For the Three Months Ended 12/31/2019 9/30/2019 6/30/2019 9,768 $ 365 (17,263) $ 225 9,660 9,034 $ 9,755 482 479 427 303 378 674 224 221 219 207 188 (4,007) 27,117 3,998 $ 10,651 10,300 $ 10,739 9,720 $ 11,044 0.29 $ (0.54) $ 0.34 $ 0.32 $ 0.34 0.01 0.01 0.02 0.02 0.01 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 (0.12) 0.85 0.12 $ 0.32 0.32 0.38 $ 0.34 $ 0.39 0.29 (0.54) $ 0.33 0.31 $ 0.34 0.01 0.01 0.02 0.02 0.01 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 (0.12) 0.84 0.12 0.32 $ 0.32 $ 0.37 0.34 $ 0.38 SS SS 20 ARES COMMERCIAL REAL ESTATE CORPORATION#21Endnotes Ares Real Estate Group Slide: PERE 100: Ares ranked 16th out of 100. Ranking applies to the Ares Real Estate Group related to selected funds managed therein. The PERE 100 measures equity raised between January 1, 2015 and March 31, 2020 for direct real estate investment through closed-ended, commingled real estate funds and co-investment vehicles that invest alongside these funds. The vehicles must give the general partner discretion over capital and investment decisions and excludes club funds, separate accounts and joint ventures where the general partner does not have discretion over capital and investments. Also excluded are funds with strategies other than real estate value-added and opportunistic (such as core and core-plus), funds not directly investing in real estate (such as fund of funds and debt funds) and funds where the primary strategy is not real estate-focused (such as general private equity funds). Ares did not pay a participation or licensing fee in order to be considered for the PERE 100 ranking. Fitch Ratings assigned a commercial real estate loan level special servicer rating of 'CLLSS2-' to Ares Commercial Real Estate Servicer LLC ("ACRES") as of July 13, 2020. To be considered for a Fitch rating, Ares paid Fitch a standard, contracted fee for initial and ongoing evaluation. The rating assigned by Fitch Ratings was solicited and assigned or maintained at the request of the rated entity/issuer or a related third party. Fitch Ratings assigns ratings to commercial mortgage special servicers on a scale ranging from Level 1 through Level 5, each of which are described below: . Level 1 Servicer Rating: Servicers demonstrating the highest standards in overall servicing ability. . Level 2 Servicer Rating: Servicers demonstrating high performance in overall servicing ability. • Level 3 Servicer Rating: Servicers demonstrating proficiency in overall servicing ability. • Level 4 Servicer Rating: Servicers lacking proficiency due to a weakness in one or more areas of servicing ability. • Level 5 Servicer Rating: Servicers demonstrating limited or no proficiency in servicing ability Investment Process Overview Slide: Fitch Ratings assigned a commercial real estate loan level special servicer rating of 'CLLSS2-' to Ares Commercial Real Estate Servicer LLC ("ACRES") as of July 13, 2020. To be considered for a Fitch rating, Ares paid Fitch a standard, contracted fee for initial and ongoing evaluation. The rating assigned by Fitch Ratings was solicited and assigned or maintained at the request of the rated entity/issuer or a related third party. Fitch Ratings assigns ratings to commercial mortgage special servicers on a scale ranging from Level 1 through Level 5, each of which are described below: Level 1 Servicer Rating: Servicers demonstrating the highest standards in overall servicing ability. • • Level 2 Servicer Rating: Servicers demonstrating high performance in overall servicing ability. • Level 3 Servicer Rating: Servicers demonstrating proficiency in overall servicing ability. . Level 4 Servicer Rating: Servicers lacking proficiency due to a weakness in one or more areas of servicing ability. • Level 5 Servicer Rating: Servicers demonstrating limited or no proficiency in servicing ability 21 24 0 ARES COMMERCIAL REAL ESTATE CORPORATION#22ARES COMMERCIAL REAL ESTATE CORPORATION