Fitch Ratings has affirmed
RATING ACTIONS
Entity / Debt
Rating
Prior
CMBS Loan Level Special Servicer
CLLSS2-
Affirmed
CLLSS2-
Page
of 1
VIEW ADDITIONAL RATING DETAILS
Key Rating Drivers
The affirmation reflects AresCRE's experienced and tenured staff, continued demonstrated proficiency in asset management and loan resolution, the historically low employee turnover and pooled staffing model, a demonstrated commitment to continual servicing technology development and modernization, and investment grade financial support provided by its parent.
The affirmation also considers AresCRE' internal controls for specially serviced loans that currently consist of manager reviews and oversight from investment committee meetings. While AresCRE has the capacity to leverage the compliance and internal audit resources of its parent, the volume of specially serviced loans has yet to be sufficient enough to fully demonstrate the proficiency of internal controls.
AresCRE is the commercial real estate (CRE) special servicing entity and an indirect subsidiary of
Ares's real estate business represents approximately
Collectively, the senior management team average 16 years of industry experience and four years of tenure, while the middle managers average 23 and 10 years, respectively. There were two voluntary middle manager departures in 2021, resulting in total function turnover of 18%, up from 0% during 2020.
AresCRE's proprietary special servicing system, the Infinity Real Estate Debt Portal, is a
Subsequent to last review, Ares internalized its internal audit function while concurrently hiring a new head of internal audit with more than 25 years of experience, providing audit and advisory services to other financial institutions. AresCRE's internal audit function is overseen by the new head of internal audit, who reports to the Ares audit committee and administratively to the CFO, previously co-sourced with a third-party vendor.
During discussions with Ares management, Fitch noted that the new internal audit scope was recently defined, with the special servicing function included. Additionally, it was noted that the newly internalized internal audit function was proactively included in recent REO workout updates, as well as other related special servicing functions.
As of
Additionally, since last review the company sold its only REO asset, which was a full-service hotel in
Additional information is available on www.fitchratings.com
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
APPLICABLE CRITERIA
Criteria for Rating North American Commercial Mortgage Servicers (pub.
Criteria for Rating Loan Servicers (pub.
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