UPDATE: Bank of America Initiates Ares Commercial Real Estate with Buy, $19 PT; Commercial Mortgage Potential

Bank of America initiates its coverage on Ares Commercial Real Estate

with a Buy rating and a price target of $19. Bank of America says, "ACRE is a newly established commercial mortgage REIT that originates and invests in loans that are credit intensive and require added flexibility to accommodate full property stabilization and value realization. We forecast ACRE will generate an attractive 8% dividend yield over a 12-month horizon plus 13% in share price appreciation potential to deliver an attractive 21% total return potential. Fundamentals are attractive in the transitional loan sector with traditional capital providers remaining largely sidelined by risk aversion and strategic retrenchment, tilting the supply/demand imbalance in favor of savvy lenders like ACRE." ACRE closed at $16.76 on Friday.