Today, Ares Management announced the final closing of Ares U.S. Real Estate Opportunity Fund IV, L.P. (AREOF IV). Through equity commitments to the Fund and related transaction vehicles, Ares raised over $3.3 billion to invest in opportunistic real estate in the U.S. This marks the largest Ares Real Estate closed-end fundraising to date, and it is a significant increase from the $2.2 billion of commitments raised for the predecessor fund and related transaction vehicles.
This Fund – combined with capital raised for the most recent vintage of Ares’ European opportunistic real estate strategy – positions Ares with $5.5 billion of aggregate opportunistic capital for attractive new investment opportunities in the U.S. and Europe. And consistent with its predecessors, AREOF IV focuses on acquiring real estate assets from distressed ownership structures and special situations, enhancing and repositioning undermanaged assets, and pursuing risk-mitigated development and redevelopment in desirable submarkets.
AREOF IV’s current portfolio includes the recent acquisition and redevelopment of the Hyatt Regency Orlando for $1.07 billion, marking one of the largest hotel transactions of this year to date. In July 2023, this fund also provided preferred equity for the conversion of 55 Broad Street in New York City’s Financial District, one of the largest office-to-residential conversions in New York City history.
This fund attracted commitments from a diverse set of new and incumbent investors across the Americas, the Middle East, Asia, and Europe, representing a broad array of institutions, such as sovereign wealth funds, public pensions, corporate pensions, insurance companies, endowments, family offices and private banks.
Ares Real Estate oversees about $52 billion of assets under management and has more than 270 investment professionals across seventeen local offices in key markets in the U.S. and Europe as of June 30, 2024. The team leverages the power of Ares’ platform and its vertically integrated operating capabilities to execute equity and debt strategies that pursue investments across markets, capital structures and property types covering the breadth of the risk-return spectrum.
KEY QUOTES:
“As capital markets stabilize, we are observing significant opportunities for AREOF IV. We believe the mounting need for capital infusions to bridge gaps created by the deleveraging that has occurred over the past two years has yielded an attractive investible universe of high-quality real estate in desirable markets.”
-David Roth, Partner and Co-Head of Ares U.S. Real Estate
“Meaningful enhancements to strengthen our origination and execution capabilities, particularly within the sectors and markets that we find most attractive, have enabled us to deploy a significant portion of the Fund in recent investments. We look forward to building on this progress while seeking to generate compelling risk-adjusted returns for our investors.”
-Andrew Holm and Jay Glaubach, Partners and Co-Heads of Ares U.S. Real Estate Investments
