Cornerstone Real Estate Advisers is taking over Ares’s US residential debt subsidiary ACRE Capital.
The company said it would pay $93m (€84m) for the subsidiary in the third quarter.
The deal will double Cornerstone’s multifamily loan portfolio to $10bn.
ACRE Capital originates and services multifamily mortgage loans, senior housing and healthcare facility loans.
Based in Plano, Texas, ACRE Capital manages around $4.4bn of unpaid loans.
Scott Brown, global president and chief executive at Cornerstone, said the acquisition expanded Cornerstone’s national commercial lending platform.
“We see significant growth in all of these sectors and will be uniquely positioned to deliver best in class executions for our clients,” Brown said.
“The affordable housing segment of the marketplace is under-served.”
He said acquiring ACRE Capital would allow Cornerstone to address the current and looming scarcity in affordable residential housing and increase lending.
Cornerstone said it had traditionally originated larger balance loans, and ACRE Capital smaller balance loans.
James Henderson, CIO at Cornerstone’s Alternative Investments Group, will manage ACRE Capital within his group post-acquisition.