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Ares Management Closes Oversubscribed Third U.S. Opportunistic Real Estate Fund

April 07, 2021, 06:00 AM
Filed Under: Real Estate

Ares Management Corporation announced the final closing of its Ares U.S. Real Estate Opportunity Fund III, L.P. (“AREOF III” or the “Fund”). The Fund, which targets distressed, repositioning, and selective development opportunities, was oversubscribed with approximately $1.7 billion of commitments compared to its $1.5 billion target. This marks the largest U.S. real estate equity fundraise for Ares to date and is a significant increase from the $1 billion of commitments raised for the predecessor fund and related vehicles.

Ares’ U.S. opportunistic real estate strategy draws on the team’s experience investing across market cycles and sectors and pursues a flexible approach that seeks to generate differentiated investment opportunities for investors. The Fund has already capitalized on what we believe is an attractive market opportunity post-COVID-19 with nine investments committed to date. The high-quality investment activity in a period of market dislocation potentially demonstrates the key advantages of the Fund’s distinct opportunistic strategy and proprietary sourcing capability through longstanding relationships. Additionally, the Fund is positioned with ample dry powder to deploy towards forthcoming opportunities as they arise.

“We are very pleased with the strong support from both new and existing investors in this fund series,” said Bill Benjamin, Partner and Head of the Ares Real Estate Group. “Our investors recognize the importance of being aligned with a cycle-tested team that can effectively capitalize on the current market opportunity.”

“We have been able to draw on our team’s deep market coverage, longstanding relationships and ability to navigate shifting market dynamics, and the experience of our U.S. real estate equity Partners Jay Glaubach, Andrew Holm and Howard Huang, in an effort to source differentiated investment opportunities. Looking ahead, the unprecedented change in space utilization has potentially widened the opportunity set for both attractive undercapitalized assets and assets within sectors experiencing accelerated demand,” said David Roth, Head of U.S. Real Estate Private Equity. “We believe that we are well positioned with our flexible mandate and experienced team to continue to build upon the great progress that the Fund has already achieved.”

The Fund garnered significant demand from a diverse set of investors from the Americas, Middle East, Asia, and Europe, representing a broad array of investor types, such as sovereign wealth funds, public pensions, insurance companies, foundations, family offices, and private banks. The Fund received support from its incumbent investor base and attracted a number of new investors to both the Ares Real Estate Group and Ares.

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