Century City-based Ares Management Corp., using funds managed by Ares Real Estate Group, has acquired two portfolios of 75 industrial properties for $1.7 billion.
The two portfolios, purchased from different sellers, have 11.9 million square feet of industrial space. The properties are spread across 16 markets in the United States, including in Southern California. Other markets in the transaction included Atlanta; Las Vegas; Chicago; Dallas; and Nashville, Tennessee.
According to Ares, roughly 80% of the assets are in infill areas.
“Backed by strong fundamentals, including rising demand and solid rental rate growth, we remain committed to expanding our interest in the high-conviction industrial sector,” David Fazekas, partner and chief investment officer of industrial at Ares Real Estate Group, said in a statement.
“We continue to focus on further diversifying our holdings in both top-tier coastal markets and high-population-growth markets that are seeing an increased need for industrial space due to strained supply chains and businesses reconfiguring operations to accommodate the storage of additional inventory,” he added.
Industrial real estate has been a hot market nationwide this past year with record transaction volume and rent growth, according to a report from CBRE Group Inc. Brokerage experts expect it to continue to be in high demand in 2022.
Demand for space from ecommerce companies is a major factor, with more retail sales taking place online than in previous years. CBRE said it expects rents on industrial properties such as warehouses to continue to rise in 2022.
Ares Management has had a busy year. In mid-December, the company announced the closing of its Senior Direct Lending Fund II, which had an anticipated $14 billion total capital base, including expected leverage.
Ares uses the fund to provide senior secured loans to middle-market U.S. companies.
In October, the company had closed its $5.1 billion junior direct lending fund.
In November, Ares and Core Spaces announced plans to acquire a portfolio of five student housing properties valued at more than $400 million using funds managed by Ares Real Estate Group. The properties have a total of 2,700 beds.
And over the summer, Ares completed its purchase of Denver-based Black Creek Group’s U.S. real estate investment advisory and distribution business.
Ares Real Estate Group had a portfolio of $37 billion in assets under management at the end of September while Ares Management Corp. had $282 billion in assets under management at the time.
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