ARES COMMERCIAL REAL ESTATE CORP (ACRE) IPO

We estimate that the net proceeds we will receive from selling common stock in 
this offering will be approximately $139.4 million, after deducting estimated 
offering expenses of approximately $3.1 million (or, if the underwriters 
exercise their overallotment option in full, approximately $160.8 million, 
after deducting the estimated offering expenses of approximately $3.1 million).
Our Manager will pay directly to the underwriters an underwriting discount of 
$5.3 million (or, if the underwriters exercise their overallotment option in 
full, $6.2 million). No underwriting discount will be paid on the 500,000 
shares purchased by Ares Investments. 

We intend to use approximately $47.3 million of the net proceeds of this 
offering to repay outstanding amounts under the Wells Fargo Facility and the 
Citibank Facility. 

As of March 31, 2012 we had approximately $43.8 million outstanding under the 
Wells Fargo Facility. This amount was used to finance the acquisition of 
certain of the senior commercial mortgage loans comprising the Initial 
Portfolio. As of the date of this prospectus, the interest charged on this 
indebtedness is 2.85%. The initial maturity date of the Wells Fargo Facility 
is December 14, 2014 and, provided that certain conditions are met and 
applicable extension fees are paid, is subject to two 12-month extension 
options. 

As of March 31, 2012 we had approximately $3.5 million outstanding under the 
Citibank Facility. This amount was used to finance the acquisition of certain 
of the senior commercial mortgage loans comprising the Initial Portfolio. As 
of the date of this prospectus, the interest charged on this indebtedness is 
4.5%. The initial maturity date of the Citibank Facility is December 8, 2012. 
If the gross proceeds of this offering are at least $200 million, then upon 
the completion of this offering the maturity date will be automatically 
extended to December 8, 2013, and may be further extended on December 8, 2013 
for an additional 12 months upon the payment of the applicable extension fee 
and provided that no event of default is then occurring. 

We intend to use approximately $6.3 million of the net proceeds of this 
offering to redeem the Series A Preferred Stock. 

We intend to use any net proceeds of this offering that are not applied as 
described above for general corporate working capital purposes, including 
originating our target investments. Until appropriate investments can be 
identified, our Manager may invest this balance in interest-bearing short-term 
investments, including money market accounts or funds, CMBS or corporate bonds,
which are consistent with our intention to qualify as a REIT. These initial 
investments are expected to provide a lower net return than we will seek to 
achieve from our target investments. 

Affiliates of Wells Fargo Securities, LLC and Citigroup Global Markets Inc. are
lenders under the Wells Fargo Facility and the Citibank Facility, respectively.
Depending on the amount of indebtedness borrowed under the Wells Fargo Facility
and the Citibank Facility and the use of proceeds from this offering to repay 
such amounts, affiliates of certain of the underwriters may receive more than 
5% of the proceeds of this offering.

Our net income depends, in part, on our ability to originate or acquire assets 
at favorable spreads over our borrowing costs. In originating or acquiring our 
target investments, we compete with other REITs, specialty finance companies, 
savings and loan associations, banks, mortgage bankers, insurance companies, 
mutual funds, institutional investors, investment banking firms, financial 
institutions, governmental bodies and other entities. In addition, there are 
numerous REITs with similar asset origination and acquisition objectives and 
others may be organized in the future. These other REITs will increase 
competition for the available supply of mortgage assets suitable for purchase 
and origination. Many of our anticipated competitors are significantly larger 
than we are and have considerably greater financial, technical, marketing and 
other resources than we do. Some competitors may have a lower cost of funds 
and access to funding sources that are not available to us, such as the U.S. 
Government. Many of our competitors are not subject to the operating 
constraints associated with REIT tax compliance or maintenance of an exemption 
from the 1940 Act. In addition, some of our competitors may have higher risk 
tolerances or different risk assessments, which could allow them to consider a 
wider variety of investments and establish more relationships than us. Current 
market conditions may attract more competitors, which may increase the 
competition for sources of financing. An increase in the competition for 
sources of funding could adversely affect the availability and cost of 
financing, and thereby adversely affect the market price of our common stock. 

In the face of this competition, we have access to our Manager's and Ares 
Management's professionals and their industry expertise, which may provide us 
with a competitive advantage and help us assess investment risks and determine 
appropriate pricing for certain potential investments. These relationships 
enable us to compete more effectively for attractive investment opportunities. 
In addition, we believe that current market conditions may have adversely 
affected the financial condition of certain competitors. Thus, not having a 
legacy portfolio may also enable us to compete more effectively for attractive 
investment opportunities. However, we may not be able to achieve our business 
goals or expectations due to the competitive risks that we face.