#1ARES Ð Ð Ð Ð Ð Ð Ares US Real Estate Opportunity Fund III, L.P. ("AREOF III) October 2020 Confidential - Not for Publication or Distribution#2Disclaimer These materials are neither an offer to sell, nor the solicitation of an offer to purchase, any security, the offer and/or sale of which can only be made by definitive offering documentation. Any offer or solicitation with respect to any securities that may be issued by any investment vehicle (each, an "Ares Fund") managed or sponsored by Ares Management LLC or any of its subsidiary or other affiliated entities (collectively, "Ares Management") will be made only by means of definitive offering memoranda, which will be provided to prospective investors and will contain material information that is not set forth herein, including risk factors relating to any such investment. Any such offering memoranda will supersede these materials and any other marketing materials (in whatever form) provided by Ares Management to prospective investors. In addition, these materials are not an offer to sell, or the solicitation of an offer to purchase securities of Ares Management Corporation ("Ares Corp"), the parent of Ares Management. An investment in Ares Corp is discrete from an investment in any fund directly or indirectly managed by Ares Corp. Collectively, Ares Corp, its affiliated entities, a all underlying subsidiary entities shall be referred to as "Ares" unless specifically noted otherwise. Certain Ares Fund' securities may be offered through our affiliate, Ares Investor Services LLC ("AIS"), a broker-dealer registered with the SEC, and a member of FINRA and SIPC. In making a decision to invest in any securities of an Ares Fund, prospective investors should rely only on the offering memorandum for such securities and not on these materials, which contain preliminary information that is subject to change and that is not intended to be complete or to constitute all the information necessary to adequately evaluate the consequences of investing in such securities. Ares makes no representation or warranty (express or implied) with respect to the information contained herein (including, without limitation, information obtained from third parties) and expressly disclaims any and all liability based on or relating to the information contained in, or errors or omissions from, these materials; or based on or relating to the recipient's use (or the use by any of its affiliates or representatives) of these materials; or any other written or oral communications transmitted to the recipient or any of its affiliates or representatives in the course of its evaluation of Ares or any of its business activities. Ares undertakes no duty or obligation to update or revise the information contained in these materials. The recipient should conduct its own investigations and analyses of Ares and the relevant Ares Fund and the information set forth in these materials. Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by Ares Corp or an Ares Fund or as legal, accounting or tax advice. Before making a decision to invest in any Ares Fund, a prospective investor should carefully review information respecting Ares and such Ares Fund and consult with its own legal, accounting, tax and other advisors in order to independently assess the merits of such an investment. These materials are not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. These materials contain confidential and proprietary information, and their distribution or the divulgence of any of their contents to any person, other than the person to whom they were originally delivered and such person's advisors, without the prior consent of Ares is prohibited. The recipient is advised that United States securities laws restrict any person who has material, nonpublic information about a company from purchasing or selling securities of such company (and options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. The recipient agrees not to purchase or sell such securities in violation of any such laws, including of Ares Corp or a publicly traded Ares Fund. These materials may contain "forward-looking" information that is not purely historical in nature, and such information may include, among other things, projections, forecasts or estimates of cash flows, yields or returns, scenario analyses and proposed or expected portfolio composition. The forward-looking information contained herein is based upon certain assumptions about future events or conditions and is intended only to illustrate hypothetical results under those assumptions (not all of which will be specified herein). Not all relevant events or conditions may have been considered in developing such assumptions. The success or achievement of various results and objectives is dependent upon a multitude of factors, many of which are beyond the control of Ares. No representations are made as to the accuracy of such estimates or projections or that such projections will be realized. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. Prospective investors should not view the past performance of Ares as indicative of future results. Ares does not undertake any obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise. Some funds managed by Ares or its affiliates may be unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments and are not subject to the same regulatory requirements as mutual funds, including mutual fund' requirements to provide certain periodic and standardized pricing and valuation information to investors. Fees vary and may potentially be high. These materials also contain information about Ares and certain of its personnel and affiliates whose portfolios are managed by Ares or its affiliates. This information has been supplied by Ares to provide prospective investors with information as to its general portfolio management experience. Information of a particular fund or investment strategy is not and should not be interpreted as a guaranty of future performance. Moreover, no assurance can be given that unrealized, targeted' or projected valuations or returns will be achieved. Future results are subject to any number of risks and factors, many of which are beyond the control of Ares. In addition, an investment in one Ares Fund will be discrete from an investment in any other Ares Fund and will not be an investment in Ares Corp. As such, neither the realized returns nor the unrealized values attributable to one Ares Fund are directly applicable to an investment in any other Ares Fund. An investment in an Ares Fund (other than in publicly traded securities) is illiquid and its value is volatile and can suffer from adverse or unexpected market moves or other adverse events. Funds may engage in speculative investment practices such as leverage, short- selling, arbitrage, hedging, derivatives, and other strategies that may increase investment loss. Investors may suffer the loss of their entire investment. In addition, in light of the various investment strategies of such other investment partnerships, funds and/or pools, it is noted that such other investment programs may have portfolio investments inconsistent with those of the strategy or investment vehicle proposed' herein. This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice. REF: RE-01435 Ø ARES Confidential - Not for Publication or Distribution. 2#3Disclaimer (continued) DUBAI INTERNATIONAL FINANCIAL CENTRE By receiving this document, the person or entity to whom it has been issued understands, acknowledges and agrees that this document, the offering and the Interests relate to the Fund, which is a foreign investment fund. The Fund is not subject to any form of regulation by the Dubai International Financial Centre (the "DIFC") or the Dubai Financial Services Authority (the "DFSA"). None of the Fund, this document, the offering or the Interests have been approved, régistered, recognised or licensed by the DIFC or the DFSA. Neither the DIFC nor the DFSA has any responsibility for reviewing or verifying this document or any other memorandum, document or information relating to the Fund. Accordingly, neither the DIFC nor the DFSA has approved this document or any other related document or taken any steps to verify the information set out in this document and has no responsibility for it. The Interests may be illiquid and subject to restrictions on their resale. Prospective purchasers of the Interests should conduct their own due diligence on the Interests. Prospective purchasers of the Interests should not rely or act upon the information included herein and this document is not, and should not be construed as, a recommendation to buy, sell or hold a particular investment. If you do not understand the contents of this document, you should consult an authorized financial advisor. This document is intended only for prospective investors who: (a) are "Professional Clients" for the purposes of, and as defined in, the DFSA Rulebook and (b) can make a minimum subscription of at least US$50,000 as specified in the DIFC Collective Investment Law and the DIFC Collective Investment Rules, and must not therefore be delivered to, or relied on by (i) a potèntial investor who is a "Retail Client" for the purposes of, and as defined in, the DFSA Rulebook, or (ii) a Professional Client not able to make such minimum subscription. Ares Administrative Services (DIFC) Limited - Representative Office located at Office 44 Gate Building Level 15, Dubai International Financial Centre, P.O. Box 113355, Dubai UAE is communicating this document on behalf of Ares Management LLC. Ares Administrative Services (DIFC) Limited - Representative Office is regulated by the Dubai Financial Services Authority as a Representative Office. SAUDI ARABIA This document may not be distributed in the Kingdom except to such persons as are permitted under the Offers of Securities Regulations issued by the Capital Market Authority. The Capital Market Authority does not make any representation as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If you do not understand the contents of this document you should consult an authorized financial adviser. لا يجوز توزيع هذا المستند في المملكة إلا على الأشخاص المحددين في لائحة طرح الأوراق المالية الصادرة عن هيئة السوق المالية. ولا تعطي هيئة السوق المالية أي تأكيد يتعلق بدقة هذا المستند أو اكتماله، وتخلي نفسها صراحة من أي مسؤولية أو أي خسارة تنتج عما ورد في هذا المستند أو الاعتماد على أي جزء منة. ويجب على الراغبين في شراء الأوراق المالية المطروحة بموجب هذا المستند تحري مدى صحة المعلومات المتعلقة بالأوراق المالية محل الطرح. وفي حال تعذر فهم محتويات هذا المستند، يجب استشارة مستشار مالي مرخص OMAN This document does not constitute an offer of the Interests. This document and any other materials relating to the Fund are being sent at the request of the recipient in Oman and may not be distributed to any person in Oman other than their intended recipient without the prior consent of the Omani Capital Markets Authority (the "CMA"). This document and the Interests may not be advertised, marketed, distributed or otherwise made available to any person in Oman other than by an entity licensed to market non-Omani securities by the CMA, and then only in accordance with any terms and conditions of such license. No prospectus has been filed with the CMA in connection with the offering of the Interests. The offer and sale of the Interests will not take place inside Oman. This document is strictly private and confidential and is being issued to a limited number of financially solvent and experienced investors, and may not be reproduced, used for any other purpose or provided to any other person than the intended recipient thereof. Prospective investors acknowledge that none of the Fund, the Interests or this document have been licensed by or registered with the CMA. QATAR AND THE QATAR FINANCIAL CENTRE This document is provided on an exclusive basis to the specifically intended recipient thereof, upon such recipient's request and initiative, and for such recipient's personal use only. Nothing in this document constitutes, is intended to constitute, shall be treated as constituting or shall be deemed to constitute any offer or sale of securities in the State of Qatar or in the Qatar Financial Centre, or the inward marketing of an investment fund or an attempt to do business, as a bank, an investment company or otherwise in the State of Qatar or in the Qatar Financial Centre. Neither this document nor the Interests have been approved, registered or licensed by the Qatar Central Bank, the Qatar Financial Centre Regulatory Authority, the Qatar Financial Markets Authority or any other regulator in the State of Qatar or the Qatar Financial Centre. Neither this document nor any related documents have been reviewed or approved by the Qatár Financial Centre Regulatory Authority or the Qatar Central Bank. Recourse against the Fund, and those involved with it, may be limited or difficult and may have to be pursued in a jurisdiction outside Qatar and the Qatar Financial Centre. Any distribution of this document by the recipient to third parties in Qatar or the Qatar Financial Centre in breach of the terms hereof is not authorized and shall be at the liability of such recipient. UNITED ARAB EMIRATES This document does not constitute an offer of the Interests. By receiving this document, the person or entity to whom it has been issued understands, acknowledges and agrees that this document and the Interests relate to the Fund, which is a foreign investment fund. The Fund is not subject to any form of regulation by the Central Bank of the United Arab Emirates (the "UAE"), the UAE Securities and Commodities Authority (the "SCA") or any other authority in the UAE (collectively, the "UAE Regulatory Authorities"). The Fund is not registered or licensed by any of the UAE Regulatory Authorities, and no approval has been received from any of the UAE Régulatory Authorities to market, offer or sell the Interests in the UAE. None of the UAE Regulatory Authorities has any responsibility in respect of this document and, accordingly, none of the UAE Regulatory Authorities has approved this document, taken any steps to verify the information set out herein or has any responsibility for it. In particular, this document has not been approved pursuant to Board Decision No. (37) of 2012 Concerning the Regulations as to Mutual Funds issued by the SCA. The offering of the Interests will not constitute a public offer of securities under applicable laws of the UAE and the Interests will not be admitted to trading on any stock exchange in the UAE. The Interests may not be offered or sold directly or indirectly to the public in the UAE. No sale or subscription for any financial products or services will be consummated within the UAE pursuant to this document, other than a sale or subscription to: 0 investment funds owned by federal or local government entities in the UAE; entities whose principal object, or among whose objects, is investment in financial instruments, provided that such sale or subscription is for the account of such entities, and not for the account of third parties for whom such entities act; and investment managers with the authority to make and execute investment decisions on behalf of their clients. 0 The entity which will conduct the private placement of the Interests is not licensed as a financial consultant, investment company, fund manager, broker, dealer or advisor under applicable laws of the UAE, and it does not advise individuals resident in the UAE as to the appropriateness of investing in, purchasing or selling any financial product. 0 Nothing contained in this document is intended to constitute UAE investment, legal, tax, accounting or other professional advice. This document is for the information of prospective investors only and nothing in this document is intended to endorse or recommend a particular course of action. Prospective investors should seek appropriate professional advice. The offering of the Interests and the Fund, and the issue of this document, in the UAE are subject to any changes in the laws of the UAE. Ø ARES Confidential - Not for Publication or Distribution 3#4Disclaimer (continued) Coronavirus and Public Health Emergency Risks As of March 17, 2020, there is an outbreak of a novel and highly contagious form of coronavirus ("COVID-19"), which the World Health Organization has declared to constitute a pandemic. The outbreak of COVID-19 has resulted in numerous deaths, adversely impacted global commercial activity, and contributed to significant volatility in certain equity and debt markets. The global impact of the outbreak is rapidly evolving, and many countries have reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores, and other public venues. Businesses are also implementing similar precautionary measures. Such measures, as well as the general uncertainty surrounding the dangers and impact of COVID-19, are creating significant disruption in supply chains and economic activity and are having a particularly adverse impact on transportation, hospitality, tourism, entertainment and other industries. The impact of COVID-19 has led to significant volatility and declines in the global public equity markets and it is uncertain how long this volatility will continue. As COVID-19 continues to spread, the potential impacts, including a global, regional or other economic recession, are increasingly uncertain and difficult to assess. Any public health emergency, including any outbreak of COVID-19 or other existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on the Fund, the pricing and fair value of its investments and real estate assets and its subsidiaries, and could adversely affect the Fund's ability to fulfill its investment objectives. The extent of the impact of any public health emergency on the Fund's and its subsidiaries' operational and financial performance will depend on many factors, including the duration and scope of such public health emergency, the extent of any related travel advisories and restrictions implemented, the impact of such public health emergency on overall supply and demand, goods and services, investor liquidity, consumer confidence and levels of economic activity and the extent of its disruption to important global, regional and local supply chains and economic markets, all of which are highly uncertain and cannot be predicted. The effects of a public health emergency may materially and adversely impact (i) the value and performance of the Fund and its investments, (ii) the ability of the Fund and/or its subsidiaries to continue to meet loan covenants or repay loans on a timely basis or at all, (iii) the ability of the Fund and/or its subsidiaries to repay their debt obligations, on a timely basis or at all or (iv) the Fund's ability to source, manage and divest investments and the Fund's ability to achieve its investment objectives, all of which could result in significant losses to the Fund. All unrealized performance information, investment strategy, and targeted returns presented throughout this presentation were prepared as of the dates indicated. Such information was prepared at such times in good faith based on a number of fundamental assumptions as of such dates, including assumptions relating to the broader economy, macro and applicable micro economic conditions, the geopolitical landscape, interest rates, availability and pricing of credit, liquidity and depth of transactional markets, health, population, and the environment, etc. With the unprecedented (and to date uncurable) advancement of COVID-19, most of those assumptions at the current time appear to be materially off or in a state of suspension. Consequently, all unrealized performance information, the portions of the investment strategy which related to targeted returns, and valuations of current investments held within or warehoused for the Fund are at the time of this writing indeterminate, but presumed to be materially lower than those last presented. While in the medium to longer term the Manager believes the Fund should see attractive opportunities consistent with its larger investment themes and strategy, it will likely take some time for the markets to recover. In addition, the operations of the Fund, its subsidiaries and investments, the General Partner and the Manager may be significantly impacted, or even temporarily or permanently halted, as a result of government quarantine measures, voluntary and precautionary, restrictions on travel or meetings and other factors related to a public health emergency, including its potential adverse impact on the health of any such entity's personnel. Confidential - Not for Publication or Distribution 4 Ø ARES#5Table of Contents Ares U.S. Real Estate Opportunity Fund III, L.P. (“AREOF III” or the “Fund”) Executive Summary_ Ares Management & Real Estate Group Overview Investment Approach & Portfolio Construction Market Opportunity_ AREOF III Portfolio and Pipeline_ AREOF III Fundraising Update and Terms_ Illustrative Case Studies Track Record Appendix_ Confidential - Not for Publication or Distribution 5 6 9 17 23 36 47 50 56 ARES#6Select AREOF Investments 1425 New York Avenue Washington, D.C. Ritz-Carlton, Kapalua, Hotel Maui, HI WEEKL HEX One Channel Center, Office Boston, MA STATE STREET Hudson Yards, Multifamily New York, NY Represents transactions previously completed by Ares Real Estate Group. Shown for illustrative purposes only. Confidential - Not for Publication or Distribution 6 Portland Distribution Center, Industrial Portland, OR Pendry Hotel, Hotel San Diego, CA PENDRY ARES#7AREOF at a Glance The AREOF Series is Ares' U.S. Opportunistic Strategy AREOF SERIES EXPERIENCE TEAM $1.7 billion Aggregate Size of Prior AREOF Vehicles(⁹) ~25 Senior Team Average Years of Experience 54 Total U.S. Real Estate Investment Professionals 16% AREOF Pro Forma Net Fair Value IRR(1)(3)(5) Over $3.9 billion* Total Equity Committed in the U.S. Over the Past 10 Years(10) 5 U.S. Cities with Local Ares Presence 130% Realized Proceeds as a % of Capital Called To Date Since 2012 103* U.S. Real Estate Transactions 1 Global Investment Committee Same team, same strategy, same fund structure Information as of June 30, 2020, unless otherwise noted. Past performance is not indicative of future results. Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. *Representative of Ares US Real Estate Opportunity Fund, L.P. ("AREOF"), Ares US Real Estate Opportunity Fund II, L.P. ("AREOF II"), Ares US Real Estate Opportunity Fund III, L.P. ("AREOF III"), Ares US Real Estate Fund IX, L.P. ("US IX"), Ares US Real Estate Fund VIII, L.P. ("US VIII"), and Ares US Real Estate Fund VII, L.P. ("US VII") from 2008 through June 30, 2020. Please refer to page 67 for a Summary of Vehicle Definitions. 7 Confidential - Not for Publication or Distribution ARES#8Executive Summary AREOF III is targeting $1.5 billion of commitments to focus on selective distressed, acquisition, and development opportunities to unlock value and create sustainable cash flows Flexible Strategy Team & Track Record Why Now? Ares Advantage Flexible investment strategy with substantial dry powder Seek to generate returns of 18-20% gross IRR, 15-17% net IRR(6) by aiming to capitalize on distressed situations, repositioning underutilized assets through active management, and selective risk-mitigated development in an environment where we believe distressed opportunities and recapitalizations are expected to capture a larger share of investable capital Ability to invest across property types and structures given experience investing across multiple cycles ● Cycle-tested team across five US offices with strong track record in all property types Approximately 80 total dedicated real estate professionals Senior leadership averages approximately 25 years of experience Predecessor U.S. opportunistic funds and their Related Vehicles are on track to meet or exceed target returns with pro forma returns of a 22% gross IRR and 1.6x gross EM (16% net IRR and 1.4x net EM) based on fair market values as of June 30, 2020(¹)(2)(3)(5) ● ● AREOF III is designed to navigate changing market conditions as the opportunity set widens as a new cycle begins The anticipated market correction has materialized and, along with unprecedented change in space usage, is creating distressed opportunities* ● We believe the Fund's substantial dry powder and multi-year investment window allows us an opportunity to capitalize on widespread market dislocation The Fund's two closed investments represent just 5% of the target fund size and we believe both are well-structured Asset-level experience of real estate team backed by a global firm with deep networks and market intelligence Utilize extensive network, deal flow, and infrastructure of Ares' broader platform to source on an off-market basis We believe informational advantages and in-house research are especially critical in a rapidly-shifting environment to inform investment decisions ● We believe deep capital markets experience, relationships and pricing power will be crucial to achieving favorable financing and sales execution in a period of rising volatility As of June 30, 2020 unless otherwise noted. Past performance is not indicative of future results. Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. There is no guarantee or assurance investment objectives will be achieved. *Based on Ares Real Estate Group's current observations of the market. 8 Please refer to page 67 for a Summary of Vehicle Definitions. ARES Confidential - Not for Publication or Distribution#9Overview of Ares Management With approximately $165 billion¹ in assets under management, Ares Management Corporation is a global alternative investment manager operating integrated businesses across Credit, Private Equity, Real Estate and Strategic Initiatives Profile Founded: AUM: 2. 3. Employees: Investment Professionals: Global Offices: Direct Institutional Relationships: Listing: NYSE - Market Capitalization:² The Ares Edge Founded with consistent credit based approach to investments 20+ year track record of compelling risk adjusted returns through market cycles 1997 $165bn¹ 1,410+ ~495 25+ 1,020+ ~$10.0bn Deep management team with integrated and collaborative approach Pioneer and a leader in leveraged finance and private credit Global Footprint³ AUM Strategies Credit $117.4bn Direct Lending Liquid Credit Alternative Credit Private Equity $26.6bn Corporate Private Equity Special Opportunities Energy Opportunities Infrastructure and Power Real Estate $14.4bn Real Estate Equity Real Estate Debt Strategic Initiatives $6.9bn Ares SSG Note: As of June 30, 2020. AUM amounts include funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of Ares Capital Corporation and registered investment adviser. Information provided is as of June 30, 2020 and pro forma for Ares Management's acquisition of SSG Capital Holdings Limited ("SSG"), which closed on July 1, 2020. Past performance is not indicative of future results. 1. Includes approximately $6.9 billion of AUM as of June 30, 2020 pro forma for the acquisition of SSG, which closed on July 1, 2020. As of September 25, 2020. Ares has a presence in Sydney, Australia through its joint venture, Ares Australia Management Pty Ltd (AAM), with Fidante Partners Limited, a wholly owned subsidiary of Challenger Limited. Jakarta, New Delhi, Sydney and Bangkok offices are operated by third parties with whom Ares SSG maintains an ongoing relationship relating to the sourcing, acquisition and/or management of investments. Confidential - Not for Publication or Distribution 9 ARES#10Ares Real Estate Group Global real estate equity and debt platform that combines local relationships, differentiated market intelligence and deep property-level experience having invested across property sectors in the U.S. and Europe $14.4 Billion AUM¹ 14 Partners averaging 25 years of experience ~80 investment professionals Specialized Experience Across Property Types: Multifamily Retail PERE Top 20 Real Estate Manager Based on 2015-20 Equity Raised Industrial Hospitality Accolades² Office FitchRatings Rated Special Servicing Platform 2016-2020 Cycle-Tested Team & Results U.S. Senior Debt Credit San Francisco Los Angeles Denver Leading Platform of Real Estate Strategies U.S. Mezzanine Debt 10 Global Real Estate Platform with Local Reach Chicago New York Washington, D.C. Atlanta Access to Real-Time Property Market & Corporate Trends London U.S. & Europe Value-Add Paris Madrid Amsterdam5 Frankfurt Luxembourg U.S. & Europe Opportunistic Legend Equity Ares Real Estate Office³ Ares Real Estate Market Coverage Location4 Additional Business Infrastructure/Support Office Disciplined Approach to Value Creation and Risk Mitigation As of June 30, 2020. Please see the Notes at the end of this presentation. 1. As of June 30, 2020. 2. The performance, awards/ratings noted herein relate only to selected funds/strategies and may not be representative of any given client's experience and should not be viewed as indicative of Ares' past performance or its funds' future performance. All investments involve risk, including loss of principal. 3. Includes Ares Management Corporation ("ARES") principal and originating offices where real estate activities take place. 4. In Madrid, Frankfurt, and Colorado, Ares Real Estate Group does not maintain a physical office, but has an investment professional dedicated to this market. 5. Non-Ares location providing administrative and support functions to the Ares Real Estate Group. Confidential - Not for Publication or Distribution ARES#11What We Believe Differentiates the Ares Real Estate Group in the Current Environment Focus on Risk Mitigation Credibility and Scale Cycle-Tested Leadership and Team ARES Real Estate Multi-Asset Platform Cycle-Tested Leadership with Local Investment Teams Leadership team averages 25 years of experience ~80 RE investment professionals located across 10 offices globally Demonstrated discipline and results across cycles Confidential - Not for Publication or Distribution ● ● ● Multi-Asset Platform Investing in Debt and Equity Specialized experience across multiple property types Debt and equity presence allows us to see more opportunities and price relative value Cycle durable business model ● ● Credibility and Scale Stable platform with robust business infrastructure ● ● Substantial banking relationships as blue-chip borrower and partner Ample capital to support funds and seek to capitalize on opportunities Focus on Risk Mitigation Aim to drive returns through value creation Relatively conservative use of leverage and well-structured loans Rigorous portfolio construction ● Our team is focused on prudent deployment as well as downside protection / loss mitigation As of June 30, 2020. There is no guarantee or assurance investment objectives will be achieved. References to downside protection are not guarantees against loss of investment capital or value. ARES 11#12Deep & Experienced U.S. Equity Real Estate Team Team of 28 U.S. real estate equity professionals with extensive investment and asset management capabilities Benefit from 29 additional Ares U.S. real estate debt professionals, further enhancing research capabilities and sourcing relationships In addition to investment professionals, Ares has approximately 30 accounting, legal and compliance professionals supporting its U.S. real estate operations Ares Real Estate Group Global Investment Committee David Roth* Jay Glaubach Andrew Holm Partner, Head of US Real Estate Equity Partner, Portfolio Manager - Partner, Portfolio Manager - Opportunistic Los Angeles New York 35 years 19 years ■ Bill Benjamin* Partner & Head of Real Estate London 34 years U.S. Investment and Asset Management Team New York Cal NeSmith Principal 10 years Forest Sonnenfeldt Vice President 6 years Adrienne Collins Analyst 2 years Daniel Taylor Managing Director Wilson Lamont* Partner, Co-Head of Europe London 20 years Daniel Carr Vice President 9 years Evan Baum Senior Associate 5 years Managing Director Opportunistic New York 15 years John Ruane* Partner, Co-Head of Europe London 20 years Ankit Sundaram Vice President 7 years Cassidy Seidl Associate 3 years Atlanta Steven Wolf Senior Advisor 34 years Pat Ragin Principal 37 years Adam Hayden Associate 4 years Investor Relations Dhaval Parikh Melanie Schiff Dags Chen Principal Vice President Research Kevin Cahill Partner London 16 years As of September 2020. *Serves on Ares Management's Global Management Committee. Confidential - Not for Publication or Distribution Michael Dreilinger Principal 32 years Kurt Baker Vice President 17 years Michael Thomas Associate 2 years Keith Kooper Partner Bryan Donohoe Partner & Head of Real Estate Debt New York 20 years Legal David Sachs Partner Los Angeles 37 years 12 Hewitt Engram Principal 12 years Michael Bartlett Vice President 9 years Brandt O'Kelley Analyst 1 year Jessica Mattoon Principal Howard Huang Partner Atlanta 35 years Julie Solomon* Partner, Investor Relations New York 20 years Joseph Hill Principal 25 years Compliance Corey Casbarro Vice President Karen Hair Associate 13 years Pedro Biezonsky Managing Director JB Gerber Partner, Head of RE Debt Originations New York 19 years Los Angeles Sam Averbach Principal 11 years Cole Kirby Associate 4 years Tae-Sik Yoon* Partner, Chief Financial Officer New York 26 years Jonathan San Antonio Vice President 12 years Finance Ryan Schierberl Vice President 13 years Grace Omoto Principal Gabriel Gonzales Senior Associate 5 years Dylan Brown Analyst 2 years Tax Carl Lemke Managing Director ARES#13Access to Real-Time Company & Industry Specific Information Ares brings a sourcing, underwriting, and execution advantage through real time information and relationships from across the firm I Global Operations: Ares has over 1,410 employees across over 25 offices across the U.S., Europe, Asia and Australia ■ I Large and Diversified Portfolio: ~251 investment vehicles with investments spanning across 5 continents(¹) In-Depth Research: We believe we have one of the largest in-house research teams, which produces proprietary research in ~60 industries Investment Benefits Generated by the Ares Platform (²) Portland Industrial 992,190 square foot industrial distribution center Montage Hotels & Resorts Investment in a luxury boutique hotel operator RW50 25-story residential development in Chicago ■ Industry Aerospace / Defense Automotive Broadcasting Cable & Satellite Chemicals Consumer Products. Diversified Media Education Energy Equipment Rental Financials Ares Coverage ✓ ✓ Industry Food/Beverage Gaming Healthcare Bldg. Products Insurance Lodging / Leisure Industrials Media Metals/ Mining Propane / Refining Paper / Packaging Ares Coverage Industry All data as of June 30, 2020. 1. Includes 10 funds as of June 30, 2020 pro forma for the acquisition of SSG, which closed on July 1, 2020. 2. Represents transactions previously completed by Ares Real Estate Group and are shown for illustrative purposes only. Confidential - Not for Publication or Distribution 13 Pharma. Publishing Restaurants Retail Services Struct. Products Supermarkets Technology Telecom Transportation Utilities Gained insight on the credit profile of the asset's sale-leaseback tenant from Ares' in-house research and credit teams Ares Coverage Leveraged insight and relationships from Ares' private equity team to determine market EBITDA multiples for hotel operating companies, factors that influence those multiples, and typical discount rates Investment sourced through Ares Private Equity Group relationship with principal of sponsor ARES#14Ares U.S. Opportunistic Strategy Track Record (¹) Demonstrated track record that has exceeded target returns ■ ■ Manage over $1.7 billion of equity capital raised across two recent U.S. opportunistic funds, AREOF and AREOF II, and Related Vehicles Of the 35 investments closed since 2012, 24 have been realized or substantially realized to date, and combined realized proceeds equal 130% of capital called to date H ■ As of June 30, 2020 ($ in Millions) Vehicle AREOF II & Related Vehicles AREOF & Related Vehicles AREOF II & Related Vehicles, which began investing in late 2015, is fully committed with $715 million in total equity commitments and over $588 million in realized proceeds from 9 realized or partially realized investments AREOF & Related Vehicles invested $732 million since 2012 and has realized proceeds equal to 164% of total committed capital Total Fund Vintage (8) 2015 2012 Vehicle Size(⁹) $1,000.9 $729.4 $1,730.3 Equity Realized Committed (10) Proceeds (11) Confidential - Not for Publication or Distribution $715.1 $732.2 $1,447.3 $588.9 $1,201.1 $1,790.1 Projected Unrealized Proceeds(12) $806.0 $12.7 $818.6 Total Projected Proceeds (13) 14 $1,394.9 $1,213.8 $2,608.7 Pro Forma Fair Value Returns Pro Forma Projected Returns Gross / Net IRR(1)(2)(3)5) 30% / 22% 20% / 14% 22% / 16% Gross / Net EM(1)(2)(3)(5) 1.5x / 1.4x 1.7x/ 1.5x 1.6x / 1.4x Gross / Net IRR(1)(2)(3)(4) 26% / 19% 20% / 14% 22% / 16% Gross / Net EM(1)(2)(3)(4) 2.0x / 1.7x 1.7x / 1.5x As of June 30, 2020. Past performance is not indicative of future results. Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. ARES 1.8x/ 1.6x#15Long Track Record of Sourcing Distressed Transactions The AREOF team capitalized on distressed situations prior to widespread market dislocation Failed Processes Rescue Capital Bankruptcy Acquisitions Re-capitalizations ■ ■ ■ I Portland, OR Industrial: Acquisition of an industrial complex in an infill submarket of Portland from a distressed seller as the result of a broken, off- market sale process Seattle, WA Office: Acquisition of a high-quality, partially-leased office building from a motivated seller following a failed auction process Maui, HI Hospitality: Fee-simple acquisition of a non-performing oceanfront Ritz Carlton hotel from a distressed seller who needed immediate liquidity; Realized Gross 45% IRR | 2.0x EM(2)(5) San Diego, CA Hospitality: Preferred equity investment in a liquidity- constrained builder in the midst of an undercapitalized construction process; Realized Gross 21% IRR | 1.4x EM (2)(5) San Francisco, CA Multifamily: Acquisition via bankruptcy auction of a fully entitled, mixed-use development site in a supply-constrained submarket of San Francisco; Realized Gross 30% IRR | 1.7x EM (2)(5) Washington DC Office: Acquisition of a 277K sf office building one block from the White House from a distressed seller facing an impending loan maturity Seattle, WA Multifamily: Acquisition of a 1,000+ unit multifamily portfolio as the result of an estate sale; Realized Gross 47% IRR | 1.8x EM (2)(5) Confidential - Not for Publication or Distribution Portland Industrial 15 Redevelopment Ritz-Carlton, Kapalua Bush Street, San Francisco As of June 30, 2020. Past performance is not indicative of future results. The following investments are being shown because they represent a comprehensive list of examples of our experience transacting in distressed situations in the AREOF series. Investments shown are for illustrative purposes only and are not representative of all investments made by the AREOF series. It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments discussed herein. There can be no assurance that the Fund will achieve its investment objectives. For the full AREOF and AREOF II track records please see pages 58 and 60. Please refer to endnotes on pages 65-66. 1425 NY Ave., Washington DC ARES#16Why Now and Why AREOF III? We believe this is the best vintage for real estate investment since the GFC Start of New Cycle Dislocation and Distress Changing Use Landscape Broad Sector Experience Ares Competitive Advantages Substantial available dry powder to invest into a profound recession and the ensuing recovery Widening opportunity set to seek to acquire distressed and undercapitalized assets at a potential discount to historical pricing and replacement cost, in line with AREOF III's investment strategy We believe changing space usage in response to COVID-19 will reward managers with significant asset repositioning, redevelopment and development experience Deep experience across property types and ability to pivot as the impact of the crisis on various asset classes evolves Cycle tested team with deep and local sourcing capabilities, structuring experience and demonstrated track record managing business plan complexity coupled with benefits of Ares scale, relationships and information sharing Based on the views of the Ares Real Estate Group as of August 31, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time.. There is no guarantee or assurance investment objectives will be achieved. ARES Confidential - Not for Publication or Distribution 16#17Investment Approach and Portfolio Construction Confidential - Not for Publication or Distribution ARES#18Established Investment Approach Dynamic Markets With Diversified Economies Major Real Estate Classes Creative Execution Value Creation Rigorous Portfolio Construction and Disciplined Leverage Focus On Exit e ● ● ● ● ● ● ● Focus on high-growth submarkets in the largest and most dynamic markets demonstrating strong job creation and demographic momentum Selective opportunities in secondary markets experiencing strong job creation and job growth Emphasis on major property types of residential, industrial, office, hotel, and retail, with selective exposure to specialized asset classes Source and structure transactions with an Ares edge through proprietary relationships, research, and specific asset and submarket experience Target investments with hands-on value creation potential to renovate, reposition, and selectively develop and redevelop underutilized assets Pursue a well-diversified portfolio of investments requiring $50-150 million of equity Employ relatively modest leverage and limit fund-level exposure by using non-recourse debt and avoiding cross-collateralization across investments Identify multiple exit strategies up front and seek liquidity upon successful business plan completion rather than market timing There is no guarantee or assurance investment objectives will be achieved. Confidential - Not for Publication or Distribution 18 ARES#19Market Tested Investment Strategy Distressed and Special Situations Reposition Undermanaged Assets Develop Core- Quality Assets Aim to capitalize on market dislocation, including rescuing overleveraged / undercapitalized projects, providing liquidity to distressed sellers and recapitalizing stalled projects ▪ Seek to improve asset quality, occupancy and rents and infuse capital for lease-up, renovation, or repositioning Pursue substantially de-risked investments in high-growth submarkets of major metro areas with a focus on core product types Confidential - Not for Publication or Distribution 19 SE Portland Industrial Redevelopment CORPORATE CAMPUS EAST Corporate Campus East Represents transactions previously completed by Ares Real Estate Group. Shown for illustrative purposes only. There is no guarantee or assurance investment objectives will be achieved. Hudson Yards Multifamily Development ARES#20Durable Investment Themes Combined with Asset Selectivity High-Growth Submarkets with Strong Job Creation Employ local experience to target emerging neighborhoods www.m 10 JENA STATE STREET One Channel Center Hudson Yards Technology Disruptions of Space Utilization Aim to capitalize on trends in e-commerce distribution and changing office needs Secular Undersupply of Rental Housing Supply high-quality rental product given barriers to homeownership District at Scottsdale 1118 Second Avenue Residences Structure to Secure Favorable Basis Structure preferred equity investments and public-private partnerships in an effort to limit Ares' last-dollar exposure Tropical Logistics Park Portland Industrial 1425 New York Avenue RW50 Represents transactions previously completed by Ares Real Estate Group. Shown for illustrative purposes only. There is no guarantee or assurance investment objectives will be achieved. Confidential - Not for Publication or Distribution 20 ARES#21AREOF III Strategy Construction and Diversification Target Portfolio of ~20 Investments Ensures sufficient diversification Allows team to focus on investments that are meaningful to overall performance Current Portfolio Construction Target Markets Closed and In-Closing Investments by Sector(¹) Industrial 11% ● Uncommitted 63% Single Family Rental Portfolio 8% Mixed-Use 7% Multifamily 3% Student Housing 3% Office 5% Closed and In-Closing Investments by Geography (¹) O Uncommitted 63% National 24% East 8% South 3% West 2% - Focus on high-growth submarkets in the most liquid, major metropolitan areas in the United States Target select opportunities in secondary growth markets Rapid-growth submarkets exhibit supply / demand imbalances and demonstrate strong job creation capacity Target portfolio characteristics reflects Ares' current expectations. Actual characteristics may materially differ. Diversification does not assure profit or protect against market loss. 1. Based on target fund size of $1.5 billion. Please see notes on page 64. Portfolio allocation information represents the two closed and the seven in-closing investments for Ares US Real Estate Opportunity Fund III, L.P. In-closing investments do not represent actual investments executed by Ares US Real Estate Opportunity Fund III, L.P. or any other Ares fund and are only provided as an illustration of the type of investments that potentially may be available. The consummation of these investments depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective investments, our acceptance of the terms and structuring of such investment and the execution and delivery of satisfactory transaction documentation. There can be no assurance that these investments will be consummated, perform as expected, or avoid significant losses. This information is shown for illustrative purposes only and is not necessarily representative of all transactions of a given type and is intended to be illustrative of some of the types of investments that may be made by Ares employing the investment strategies detailed in this presentation, and are not necessarily representative of the investment opportunities that will be available to Ares US Real Estate Opportunity Fund III, L.P. Confidential - Not for Publication or Distribution#22AREOF III Leverage Profile(¹) Ares seeks to employ a prudent approach to use of leverage Asset Leverage Approach Cross- Collateralization Policies Subscription Facility ■ I I ■ ■ ■ ■ ■ Maximum 70% leverage at portfolio level, target of 65% Rely almost exclusively on non-recourse debt Prudent use of fund-level debt facilities while avoiding fund level guarantees Ares does not cross-collateralize loans across separate transactions within a fund Assets acquired or assembled as a portfolio may, however, be cross-collateralized Ares uses a subscription facility during the Fund's investment period as a cash management tool, enabling the fund to act quickly and to provide time to place permanent debt on properties AREOF III's subscription facility is provided by SMBC and expires in February 2022 with 2 one-year extension options at our discretion Current size/Maximum Size/Balance: $100 million / $400 million / $46.5 million The use of leverage magnifies the potential for gain or loss on the amount invested and may increase the risk of investments. 1. The leverage profile described herein is shown for illustrative purposes only and should not be construed as a reflection of the exact leverage profile undertaken or to be undertaken by AREOF III. Confidential - Not for Publication or Distribution. 22 ARES#23Potential Market Opportunity ARES Note: The information contained in this presentation represents Ares Real Estate Group's views as of August 31, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. The views expressed in the foregoing are those of the Ares Real Estate Group as of August 31, 2020, and do not necessarily reflect the views of Ares Management Corporation ("Ares Corp," together with Ares Management LLC or any of its affiliated entities "Ares"). The views are provided for educational or informational purposes only, are not meant as investment advice, and are subject to change. The information set forth is provided merely to provide a framework to assist in the implementation of an investor's own analysis and an investor's own views on the topic discussed herein. Moreover, while this document expresses views as to certain investment opportunities and asset classes, Ares may undertake investment activities on behalf of one or more investment mandates inconsistent with such views subject to the requirements and objectives of the particular mandate. Projections and forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Certain information contained herein concerning economic trends is based on or derived from information provided by independent third-party sources. Ares believes that such information is accurate and that the sources from which it has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Moreover, independent third-party sources cited in these materials are not making any representations or warranties regarding any information attributed to them and shall have no liability in connection with the use of such information in these materials. Confidential - Not for Publication or Distribution#24Real Estate Market Overview COVID-19 has triggered a global recession with divergent impacts across product types Global Recessionary Environment Impact on Property Values Impact on Ares' Strategy The U.S. has experienced dramatic GDP declines since the pandemic's outbreak in Q1 2020(¹) U.S. GDP is expected to require at least two years of recovery, with a lagging rebound in employment (¹) We believe the global economy is certain to face headwinds until at least 2022, creating distressed buying opportunities Public real estate valuations were severely impacted by the outbreak of the pandemic Since then, different property sectors have signalled divergent recovery profiles We believe industrial and multifamily sectors are poised to benefit from growing secular tailwinds and robust investor demand ● Hotel and retail assets entered severe distress, with forced shutdowns and dramatic shifts in consumer behavior signalling a prolonged recovery Ares has dynamically responded to these shifting market conditions across asset classes Intensive focus on industrial given acceleration of e-commerce penetration and shortening supply chains Long-term conviction in multifamily given continuing declines in home affordability and muted late-cycle supply Office evaluated case-by-case, with emphasis on strong markets and distressed pricing Hotel is also in deep distress, but we believe is poised to recover in the intermediate term, providing potential opportunities to participate in the recovery on a structured basis given capital market dislocation ● Office remains TBD, as users grapple with the benefits and limitations of remote work and health-related de- densification trends We believe niche sectors such as single-family rental and medical office are also poised to benefit Retail faces significant challenges given changes in consumer trends and multiplying tenant bankruptcies Selective opportunities in niche assets are expected to supplement, but not dominate, the portfolio In the midst of widespread pricing dislocation, Ares will seek to create alpha by pivoting between sectors as these trends evolve Based on Ares' Real Estate Group's current observations of the market as of August 31, 2020. There is no guarantee or assurance investment objectives will be achieved. The situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. 1. Bloomberg Consensus Forecasts as of September 2020. ARES Confidential - Not for Publication or Distribution 24#25U.S. Faces Gradual Recovery Following Deep and Sudden Recession We believe the U.S. economy will require at least two to three years to stabilize at or near 2019 metrics Indexed Real GDP (Q4 2019 = 100) 102.0 ● 100.0 98.0 96.0 94.0 92.0 90.0 88.0 U.S. Real GDP and Unemployment Dramatically Impacted by COVID-19 Outbreak 2020 COVID-19 2021 GDP (Historical) Unemployment (Historical) Sources: Bloomberg Consensus Forecasts as of September 2020 2022 16.0 COVID-19 triggered GDP decline of 10.2% from 1H 2020 GDP projected to recover to 2019 baseline by early 2022 Unemployment projected to return to 2019 levels after 2022 14.0 12.0 10.0 8.0 6.0 4.0 2.0 GDP (Forecast) Unemployment (Forecast) Unemployment (%) 4 2 Quarterly Change in U.S. Jobs (Millions) 00 0 4 -10 -12 -14 2006 After Unprecedented Drop, Employment Recovery Just Beginning 2008 GFC 2010 2012 Sources: Bureau of Labor Statistics as of August 2020 For illustrative purposes only. Forecasts are inherently limited and should not be relied upon as indicators of actual or future results. Confidential - Not for Publication or Distribution 25 2014 2016 Payrolls up by 3.1 million in July-August 2018 2020 Payrolls down by 13.3 million in Q2 Unprecedented scale and speed of job losses due to COVID-19, eclipsing the peak job losses of the GFC July/August rebound points to a correction of the bottom rather than a snap-back to pre-COVID employment ARES#26COVID-19 Downturn Is Not Affecting All Property Sectors Equally Despite a broad correction in the real estate markets, property performance and values have diverged by asset type Indexed Public, Private Real Estate Prices (100 = January 2007) 160 140 120 100 80 60 40 20 Public and Private Real Estate Market Performance Since 2007 GFC enterertige Peak-to-Trough Pricing Public REIT Share Price: -68% (daily returns) Estimated Private Valuations: -33% 0 2009 2007 Sources: FTSE NAREIT, Green Street as of September 2020 2011 2013 Public Peak-to-Trough Pricing Public REIT Share Price: -35% (daily returns) Estimated Private Valuations: -11% COVID-19 2015 Private Confidential - Not for Publication or Distribution 2017 Although not as pronounced as the GFC, both the public and private real estate markets have experienced steep value declines post-COVID For illustrative purposes only. There is no assurance the above trends will continue. 2019 26 20% 10% 0% -10% -20% -30% -40% -50% Public REIT Pricing Impacts by Property Sector February 2020 Peak to Current -44% Hotel Retail -39% Office -33% Multifamily -32% Sources: FTSE NAREIT, Green Street as of September 2020 Student Housing REIT Composite -26% -18% -2% -2% Industrial Single-Family Rental Data Centers 10% Composite market-wide declines of 18% obscure a wide range of outcomes by property sector ARES#27Divergent Sector Performance Driven By Unique Impacts of COVID-19 The pandemic is fueling unprecedented changes in use patterns across asset classes Traditional Model Industrial Supply chains predominantly serviced brick-and-mortar retailers Multifamily Rentals represented a cheaper alternative to for-sale housing Office Corporate tenants under long- term leases with hierarchical, partitioned spaces Hospitality Well-defined price points based on standardized brands and service levels Retail In-person shopping with limited e- commerce penetration Adjacent Sectors SFR, medical office, student housing see niche demand from niche players Real Estate in 2019 Industrial Supply chains revamping for just-in- time e-commerce and omni-channel retailing Multifamily Amenitized communities increasingly cater to higher-income renters by choice Office Serviced/co-working office providers changing the traditional use/lease model Hospitality Increasing pressure on owner/operators from emerging lifestyle brands, home-share platforms and increasing labor costs Retail Adoption of online platforms has changed traditional sales channels; shifts to emphasize dining, entertainment and experiential retail Adjacent Sectors Increasing popularity as investors chase yield Industrial ■ Surging demand from accelerated e-commerce penetration Aided by shortening supply chains and domestic/regional stockpiling of critical goods " ■ ■ ■ M ■ ■ Real Estate Post COVID-19 ■ Multifamily We believe the asset class will remain resilient with support from strong demand Urban/suburban dynamics and collection statistics warrant per-asset scrutiny COVID-related regulatory changes may alter risk/reward in certain markets Office We believe hybrid in-person/remote work arrangements will persist We expect de-densification to impact layouts, locations and overall footprints We expect some resurgence of suburban product vs. urban Future of co-working (e.g WeWork) now even more uncertain Hospitality Lengthening shut-downs have led to deep distress Recovery forecast by 2024/2025 We believe leisure travel will recover first with convention business lagging Significant operating shortfalls for owners and operators Retail Widespread shut-downs of non-essential retailers Multiplying sector bankruptcies ■ Dramatic space compression Oversupply of existing stock in the face of anemic tenant demand Adjacent Sectors Demand drivers accelerate Asset classes mature into institutional sectors with steady growth and yield drivers Ares Based on Ares' Real Estate Group's current observations of the market as of August 31, 2020. There is no guarantee or assurance investment objectives will be achieved. The situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed.*Classified according to Ares' proprietary methodology based on available data. Green circles indicate sectors that we believe are experiencing tailwinds as result of changes created by, or accelerated by, COVID-19; orange circles represent sectors that we believe are exhibiting a more uncertain outlook as a result of COVID-19; red circles represent sectors that are experiencing significant headwinds due to COVID-19 and as a result are unlikely to be sectors that Ares seeks to target. The assumptions underlying this proprietary methodology are subject to change, may not prove to be true and actual risks may be different than the classifications presented herein. Accordingly, no representation or warranty is made in respect of this information.#28Industrial Poised to Outperform Logistics and last-mile distribution demand bolstered by acceleration of e-commerce trends E-commerce as a % of Retail Sales Pandemic Accelerates Build Out of e-Commerce Platforms 40% 30% 20% 10% 0% 6.0% ● 2000 7.3% 2005 9.5% 2010 12.8% 2015 14.2% 2016 15.2% 15.1% 2017 2018 17.4% 2019 22.1% June 2020 39.0% Source: Census Bureau, CBRE as of June 2020. Pandemic forecasted to accelerate continued growth in e- commerce, driving demand for regional distribution and last- mile facilities 2030 Forecast Net Industrial Absorption (100,000,000 SF) Industrial Demand On Pace to Outperform Past Recessions 350 250 150 50 -50 -150 -250 1985 1990 1995 Source: Costar as of Q2 2020 2000 2005 2010 G For illustrative purposes only. Forecasts are inherently limited and should not be relied upon as indicators of actual or future results. Confidential - Not for Publication or Distribution 28 2015 2020F Industrial demand expected to be far stronger than in past downturns Positive secular trends have accelerated due to COVID-19 and have muted any adverse impacts to rents and values, increasing relative investor demand for the industrial sector Ares will continue its strategy of investing in core-quality distribution assets, with an emphasis on bulk logistics and last-mile facilities that cater to e-commerce demand ARES#29Multifamily Sector Remains Resilient Asset class durability due to declining home affordability, comparatively stable rent collections and relative undersupply House Prices, Wages (Jan'14 = 100) 140 ● 130 Housing Price Growth Continues to Outpace Wage Growth 105 120 110 100 U.S. Multifamily Collection Rates 2014 Source: Case Shiller, BLS 100% 95% 90% 2015 85% 80% 2016 House Prices 97.7% 94.6% April 2017 Home price appreciation has outpaced income growth impacting affordability and therefore renter demand 96.6% U.S. 2019-2020 Multifamily Collection Rates Rates Have Been Stable 95.1% May 2018 Wages 96.0% T 2019 95.9% June 2019 2020 Affordability 2020 96.6% 95.7% July 94.0% 100 95 90 85 Affordable) Affordability (Lower = Less 92.1% August Source: NMHC as of August 2020 Collections have remained relatively stable through pandemic, creating relatively durable cash flows Cum. MF Units Built (mil.) Net Absorption as % of Stock U.S. Renter HH Formation vs. Cumulative Units Delivered 14 -11990 4.0% 3.0% Despite uptick in supply, renter household formations have outpaced new additions to the sector Growth Metros Absorption Stable During Pandemic 2.0% 1.0% Estimated 4.1 million more renter households formed since 1990 than rental units completed 0.0% 1994 2002 1998 Renter HH Formed (millions) Source: Census Bureau as of Q1 2020 2006 2014 2018 2010 ■MF Units Constructed (millions) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 National 18-Hour Source: Costar as of Q2 2020 18-Hour Metros Absorption Rate 50% higher on average than U.S. since 2015 Durability of renter demand and cash flow profile has sustained investor appetite post-COVID, with increased interest in suburban/garden product Ares is responding to investor demand by continuing its focus on the sector, with an emphasis on lower-density product in undersupplied geographies with strong demographic tailwinds For illustrative purposes only. There is no assurance the above trends will continue. 14 Cum. Renter HHs formed (mil.)#30Office Outlook Warrants Caution We believe remote work and higher unemployment is likely to suppress demand, though questions abound COVID-19 Presents Challenges and Benefits for Office Longer-Term (¹) 18-Hour Cities Represent a Growing Share of National Office Net Absorption (¹) Long-Term Impact Positive Fundamental Drivers WFH Fatigue Distressed Pricing Construction Costs Tech Sector Space Utilization Business Confidence Corporate Profits, Office Employment Remote Work (WFH) Co-working Positive Positive Neutral Neutral Negative Negative Negative Negative Possible Outcomes Companies and employees have recently signaled declining WFH productivity, creating urgency to return to collaborative office environments REIT valuations across the sector are ~33% down, impacting a variety of high-quality assets that may be available for a discount Lower construction expenses would help cut back tenant improvement and capital expenditure costs Despite liberal WFH policies, some tech firms actively leasing space during pandemic Years-long densification trend likely over, but social distancing may not be sufficient to drive expanded space requirements Dropped sharply during pandemic, recovered slightly. Continued uncertainty depresses corporate outlooks Corporate profits on pace for double-digit declines in 2020. Sharp drop in office employment The increase in WFH appears to be a trend, not a fad, and may reduce aggregate office demand by 10-15% in the coming years The larger operators, such as WeWork, have reported closures of >20% of their existing locations 18-Hour Share of National Absorption (%) 60% 55% 50% 45% 40% 35% 30% 25% 20% Secular trend: share of national net absorption is increasingly driven by 18-hour metros, from 26% in 2006 to 54% in 2020. At the same time, 18-hour metro vacancy rates have declined. 2006 2008 2010 2012 2014 2016 2018 2020 The future of office remains an open question Ares is selectively underwriting what we believe to be high-quality investments featuring distressed pricing or downside-protected structuring, with a focus on 18- hour cities with relative job stability / creation and high barriers to new supply For illustrative purposes only. The long-term impact designations have been classified according to Ares' proprietary methodology based on available data. "Positive " means a positive impact on the office sector, "Neutral" means no impact on the office sector and ""Negative" means a negative impact on the office sector based on our views as of September 10, 2020. The assumptions underlying this proprietary methodology are subject to change, may not prove to be true and actual risks may be different than the classifications presented herein. Accordingly, no representation or warranty is made in respect of this information. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. References to downside protection are not guarantees against loss of investment capital or value. 1. Adapted from Green Street "Office Sector Update," August 2020#31Hotel Experiencing Short-Term Distress With Longer-Term Recovery Pandemic lockdowns and travel restrictions have resulted in an unprecedented demand shock, with a gradual recovery forecasted to take as long as three to four years Prolonged Recovery of Hotel Profits and Valuations Prices as % of 2019 Values by Impact Level ● 120% 100% 80% 60% 40% 20% 0% 2019 2020F 2021F Least Impact Greatest Impact 2022F 2023F Source: Green Street, HVS June 2020 Outlook Forecast 2024F 2025F Typical Impact EBITDA Margin 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% After sudden and precipitous declines, hotel valuations and EBITDA margins are not forecasted to recover prior to 2023-2024 EBITDA Margin % of CMBS Loans Outstanding in Special Servicing 22228ENND 26 24 20 31 18 16 14 12 Aug-19 CMBS Special Servicing Rates by Property Type Overall Sep-19 Oct-19 Nov-19 Special Servicing Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 For illustrative purposes only. Forecasts are inherently limited and should not be relied upon as indicators of actual or future results. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all Confidential - Not for Publication or Distribution ****** Jul-20 Source: Trepp as of September 2020 Dramatic increase in special servicing indicates a near-term wave of foreclosures, distressed note sales and bankruptcy/REO auctions Industrial Lodging Multifamily Office Retail The severe impact of COVID-19 on hotel operations is expected to require a prolonged recovery to profitability and prior valuations Given legacy portfolio issues and a lack of current cash flow, traditional sources of financing including CMBS, banks, and insurance companies are largely closed for hotel borrowers Aug-20 Given its deep sector experience, we believe Ares is poised to capitalize on this capital markets dislocation in the hospitality sector by offering structured, downside-protected liquidity solutions to cash-strapped hotel borrowers ARES#32Retailer Bankruptcies Per Annum Retail Continues to Suffer From Long-Term Demand Trends COVID-19 has accelerated the secular forces driving a widespread decline in rents, occupancy and asset values 60 50 40 30 20 10 0 48 17 31 45 14 31 2010 2011 U.S. Retailer Bankruptcies Per Annum 24 9 15 21 5 16 20 7 13 31 11 20 32 13 w 19 Confidential - Not for Publication or Distribution 40 15 25 33 11 22 32 8 24 44 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD YTD through mid-Aug Rest of the Year 44 Source: S&P Global Intelligence as of August 2020 Retailer bankruptcies in 2020 are outpacing recent averages and expected to continue, triggering store closures and impacting tenant demand For illustrative purposes only. There is no assurance the above trends will continue. Global Sales Volume (All Properties) vs Retail Property Sales 32 Billions) Rolling 4Q Global Property Transactions 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 2015 2017 All Property Types 2016 2018 2019 2020 Retail 160 150 140 130 120 110 100 90 80 Severe distress in the retail sector shows few signs of abatement, crippling institutional demand Ares sees meaningful headwinds to any investment in the sector, with the exception of significant change of use or redevelopment opportunities ARES Rolling 4Q Retail Property Transactions ($ Billions) Source: Real Capital Analytics as of Q2 2020 COVID-19 has accelerated a steady decline in investor appetite for retail product#33Opportunistic Funds Raised in Recessions Have Outperformed Other Vintages 35% 25% 15% 5% -5% 2.5 2.0 1.5 1.0 0.5 1994* 1995 Pooled IRRs of Opportunistic Funds by Vintage Year 1996 1997 Recession Year 1998 Recession Year 2001 1998 2002 2003 Confidential - Not for Publication or Distribution 2004 2005 2009 Pooled Net Multiples of Opportunistic Funds by Vintage Year 2005 2010 2011 2012 33 2013 ● Funds raised and deployed in or around the early 90s, 2001 and 2009 recessions were poised to capitalize on widespread market distress Net IRRs/net multiples for these vintages of opportunistic funds outperformed adjacent vintages Source: Cambridge Associates LLC. For illustrative purposes only. There is no assurance the above trends will continue or that the current recession will yield results similar to that of past recessions. Past performance is not indicative of future results. *Return data series begins in 1994. Data is across Global Funds. Performance based upon 602 opportunistic funds around globe. Cambridge Associates "Q4 2019 Real Estate Index Benchmark Statistics". ARES We believe that we will be similarly positioned at the outset of a deep and unpredictable economic crisis#34How We are Positioned The AREOF strategy is purpose-built to navigate changing market conditions 1 We originally expected the AREOF III portfolio to be evenly balanced across acquisition, development and distressed transactions, with the opportunity to weight the portfolio towards distressed opportunities should we see more widespread/systematic corrections 2 3 We believe substantial available dry powder and a multi-year investment window will allow us an opportunity to capitalize on opportunities as they take shape 4 5 The anticipated correction has materialized 6 Team of 54 US investment professionals have deep experience investing in all property types across cycles, including periods of comparable displacement Real-time industry and market intelligence from Ares' corporate credit and private equity groups provides global insight into market movements and tenant behavior We believe AREOF and AREOF II are well positioned to weather the current environment AREOF and Related Vehicles is largely realized with two remaining assets and solid return visibility with $12.7mm of projected unrealized proceeds against $1.2bn realized (11)(12) AREOF II distributed proceeds of 90% capital called with no hospitality and minimal retail exposure in its eleven unrealized assets as of June 30, 2020 We believe AREOF III's existing portfolio of two closed investments is defensively positioned, and we are cautiously moving forward with three resilient in-closing investment opportunities 7 Based on Ares Real Estate Group's views as of August 31, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. Performance information as of June 30, 2020. There is no guarantee or assurance investment objectives will be achieved. Projections and forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed Past performance is not indicative of future results. Please see pages 58 and 60 for the full AREOF II and AREOF track records. Please see endnotes on pages 65-66. ARES Confidential - Not for Publication or Distribution 34#35We Believe Unprecedented Change Creates Opportunity What? Near Term Potential Opportunities Distressed real estate loans and loan portfolio acquisitions Structured capital infusions to bridge refinancing shortfalls upon loan maturities ● ● ● Intermediate Term Potential Opportunities Acquisition of projects auctioned off in bankruptcy Acquisitions of high-quality REO assets Recapitalization of stalled construction projects Distressed acquisitions of high-quality hotels at deeply discounted pricing ● ● Preferred equity positions to capitalize distressed and discounted loan purchases ● High-quality, well-located office buildings that have lost co- working and other tenants Distressed acquisitions of failed retail centers for repurposing or redevelopment Confidential - Not for Publication or Distribution ● 35 How? Participation in failed processes and busted auctions Sale / leasebacks and other structured investments in the owned real estate of operating businesses Public-to-privates Portfolio aggregation or break-up to capitalize on arbitrage opportunities Platform creation Selective, de-risked development ● ● ● From Whom? Over-leveraged asset owners who have lost money, interest or control Asset owners and operating businesses facing liquidity constraints Relationship lenders with assets post foreclosure Funds at end of term Based on Ares Real Estate Group's views as of August 31, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Information related to any identified opportunities does not represent an actual investment executed by AREOF III or any other Ares fund or investment vehicle and is only provided as an illustration of the type of investments that potentially may be available. The consummation of any of these depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective investments, our acceptance of the terms and structuring of such investment and the execution and delivery of satisfactory transaction documentation. There can be no assurance that any of these investments will be consummated, perform as expected, or avoid significant losses. ARES • Non-natural owners of real estate (e.g. corporates)#36AREOF III Portfolio and Pipeline ARES The following investments reflect all closed and in-closing investments in AREOF III as of June 30, 2020. In-closing investments do not represent actual investments executed by Ares US Real Estate Opportunity Fund III, L.P. or any other Ares fund and are only provided as an illustration of the type of investments that potentially may be available. The consummation of these investments depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective investments, our acceptance of the terms and structuring of such investment and the execution and delivery of satisfactory transaction documentation. There can be no assurance that these investments will be consummated, perform as expected, or avoid significant losses. This information is shown for illustrative purposes only and is not necessarily representative of all transactions of a given type and is intended to be illustrative of some of the types of investments that may be made by Ares employing the investment strategies detailed in this presentation, and are not necessarily representative of the investment opportunities that will be available to Ares US Real Estate Opportunity Fund III, L.P. Confidential - Not for Publication or Distribution#37Detailed Summary of AREOF III Investments $71 million committed to closed transactions with seven additional in-closing investments Closed investments as of June 30, 2020 Washington, D.C. Multifamily^ Ground Lease Aggregation Project LaGrange Investment 1425 New York Avenue Tropical Logistics Park Total Closed: Closed and In-Closing Investments as of October 1, 2020 Washington, D.C. Office Texas A&M Student Housing Industrial JV Single Family Rental Portfolio Total Closed and In-Closing: Property Type Office Industrial GRAND TOTAL: Multifamily Mixed-Use Industrial Office Student Housing Location Industrial Single-Family Washington, D.C. Las Vegas, NV Washington, D.C. National National Washington, D.C. Houston, TX National National ^This investment closed in August 2020. *Represents equity required for Phase I should Ares decide to proceed with vertical development. **Expected net of co-investment. Size +Initial equity commitment of $59 million expected with total potential equity commitment of $200 million. ++Initial equity commitment of $78 million expected with total potential equity commitment of $150 million. Confidential - Not for Publication or Distribution 37 277K SF 1.3MM SF 1,200 units 2.3MM SF 176K SF 1,872 beds 3.2MM SF 10,000+ homes Equity Acquisition Committed (¹) Date ($mm) Jan-20 $35.8 Feb-20 35.0 $70.8 Anticipated Equity Commitment (5) ($mm) Please refer to notes on page 36 and endnotes on pages 65-66. These investments reflect the closed and in-closing investments in AREOF III as of October 1, 2020. $50.0* 100.0** 59.0* 32.0 38.0 78.0++ 120.0 $477.0 $547.8 Equity Funded (2) ($mm) $14.1 26.0 $40.1 Equity Funded (2) ($mm) $0.0 0.0 0.0 0.0 0.0 0.0 0.0 $0.0 $40.1 ARES#381425 New York Avenue NW, Washington, D.C. - Closed Acquisition of a 13-floor office asset located proximate to the White House in Washington, D.C. Acquisition Date: Location: Gross Capitalization: (¹) Equity Committed:(2) Capital Value: Key Metrics Investment Theme: Jan-2020 Washington, D.C. $137 million $36 million $475 PSF Office repositioning in gateway city As of June 30, 2020 unless otherwise noted. Please refer to the endnotes on page 64. Confidential - Not for Publication or Distribution ■ ■ I ■ ■ ■ I Investment Summary and Rationale Acquisition of a 13-story, 277K SF vacant office building located in Washington, D.C. one block from the White House with significant pre-leasing in place Ares believes this is a compelling opportunity to achieve opportunistic returns through implementing a capital improvement plan on a well-situated office asset Ares is partnering with a Washington, D.C. based operator that has a successful track record in repositioning office assets Deferred portion of the purchase price tied to timing of executing GSA lease, significantly mitigating risk of delay in executing base case business plan Value Drivers Attractive basis significantly below replacement cost All-in basis of $475 PSF is well below replacement cost Capture value through leasing to GSA Federal tenants with strong credit The asset is currently 100% vacant, but there is a GSA tenant nearing lease execution for 65% of the rentable area There is additional pre-leasing interest from several other GSA prospects, which would bring occupancy to 83% Asset enhancement through capital improvement plan Renovation initiatives include a lobby upgrade, elevator modernization, restroom refurbishment, roof improvements, and other base building costs Investment Status The asset was awarded to Ares in November 2019 and closed in January 2020 JV continues pre-development to upgrade base building systems (phase I) and build out tenant improvements (phase II) Recently received confirmation from the GSA that they are preparing to execute the lease in the near term ARES 38#391425 New York Avenue NW, Washington, D.C. - Update We believe this is a defensively positioned, well-located asset with substantial leasing activity in progress, flexible leasing plan and relatively modest carrying costs 1 2 3 4 5 Lease in process with GSA tenant for 65% of building expected to be executed in 3Q 2020; Structured purchase price with deferred consideration that depends on lease execution Location proximate to White House and U.S. Treasury Department positions asset to potentially attract additional GSA and private sector tenants as government ramps up COVID-19 response Ares believes in the project's leasability over the anticipated hold period due to significant existing demand from GSA tenants and current scarcity of affordable office space proximate to the White House Project may also benefit from relatively modest annual carry costs and flexible leasing plan In pre-development stage of property renovation with no supply chain issues identified at present As of June 30, 2020 unless otherwise noted. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. The information contained herein represents Ares Real Estate Group's views as of June 30, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. ARES Confidential - Not for Publication or Distribution 39#40Tropical Logistics Park, Las Vegas, NV - Closed Development of up to 1.3MM SF of bulk distribution industrial product in an infill Las Vegas submarket Acquisition Date: Location: Gross Capitalization: (¹) Equity Committed:(2) Capital Value: Investment Theme: Key Metrics Feb-2020 Las Vegas, NV $151 million $35 million $96 PSF Industrial development in strong MSA ■ ■ Investment Summary and Rationale Investment in the development of up to ~1.3MM SF of bulk distribution/warehouse space with freeway frontage along the 1-15 Freeway in Las Vegas, NV Opportunity to develop industrial product in an infill Las Vegas industrial submarket with limited land availability Aim to capitalize on robust supply/demand fundamentals both in the local market and across the southwestern region of the United States Value Drivers Strong Las Vegas market The Las Vegas industrial market has seen 8%+ average rent growth over the past five years and sits at 4.2% vacancy* - Market occupancy is driven by business-friendly climate, no corporate income tax, strong labor pool and proximity to the ports of Los Angeles and Long Beach for regional distribution Complex land assemblage The land site constituted 18 different parcels owned by 13 separate land owners Sponsor assembled the land over 24 months at below-market pricing, contributed to the JV at cost Construction risk mitigation Ares negotiated a preferred position in the undeveloped land with the right to force and control a land sale should we elect not to go vertical JV agreement shifts cost overrun and guaranty risk from Ares to Sponsor Experienced sponsor with deep Las Vegas knowledge The Sponsor owns over 17MM SF of industrial in the Western U.S., including 3MM SF+ in Las Vegas. Investment Status Closed in February 2020 Executed LOI for full build to suit of one million square foot bulk distribution facility to a major corporate user Construction scheduled to commence in fall 2020 ARES As of June 30, 2020 unless otherwise noted. Please refer to the endnotes on page 64. *CoStar, Q1 2020. Confidential - Not for Publication or Distribution 40#41Tropical Logistics Park, Las Vegas, NV - Update Unleveraged preferred position at a below-market basis in a land-constrained submarket with the unilateral right for Ares to sell the land and recoup its equity 1 2 We continue to maintain our preferred position in the unleveraged land which is senior to our sponsor's common equity Executed LOI for a one million SF build-to-suit with a national credit tenant, with construction scheduled to commence in fall 2020 3 Recent market trades in Q4 2019 were 23% above our preferred basis in the land, and the unsolicited land purchase offer received prior to the pandemic is 48% above preferred basis* 4 5 Currently negotiating GMP for one million SF build-to-suit, with limited COVID complications due to essential construction work rules and domestically sourced materials Demand for the remaining ~300K SF has remained robust, with several RFP responses in process As of June 30, 2020 unless otherwise noted. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. The information contained herein represents Ares Real Estate Group's views as of June 30, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject to change at any time. *CoStar, Q4 2019. ARES Confidential - Not for Publication or Distribution 41#42Washington, D.C. Multifamily – In-Closing+ Option to control a multi-phased multifamily development project consisting of up to approximately 1,200 units located in one of the strongest and fastest growing submarkets in D.C. an Investment Date: Location: Gross Capitalization: (¹) Anticipated Total Equity Committed:(3) Anticipated Initial Equity Committed:(3) Capital Value: Investment Theme: Key Metrics Q3 2020 Washington, D.C. $145 million++ $115 million $50 million* $354K Unit* Multifamily in Supply Constrained Market I Investment Summary and Rationale Investment in a two-year option to invest in a multi-phase, 1,200 unit multifamily development located in the NoMa submarket of Washington, D.C. Represents an opportunity to develop a trophy asset in a resilient, gateway city with flexibility on timing of groundbreaking as we continue to assess the impact of COVID and absorption of local market, and requires minimal upfront equity Value Drivers Class-A Washington, D.C. Multifamily Positioned to Outperform D.C. has proven to be a resilient market with transaction pricing rebounding to pre- recession levels six quarters faster than the U.S. average post the GFC** The workforce concentration lends stability in times of distress(¹) and submarket rent growth never fell below 2% during the same period *** The NoMa submarket is largely built out with limited new supply planned; Across D.C. new supply is forecast to remain below 1.0% of existing supply over the next three years*** Phased Development and Transaction Structure Mitigates Risk and Provides Optionality Ares negotiated a two year option to acquire the site before making a full commitment, and structured a favorable land basis due to its experience with public private partnerships The property is priced at a 50-60% discount to pre-COVID land trades in the market and Ares will have a low cost option to close until Q2 2022**** Ares believes it is rare to control an urban, infill site of this size and quality for such an extended period at a low option price Strong Sponsor Track Record and Repeat Ares Partner The Project will be developed in partnership with an experienced local sponsor with direct experience in the NoMa submarket and with whom Ares has previously transacted - Investment Status Documentation for this transaction was finalized in August 2020 *This investment closed in August 2020. **Gross capitalization of Phase I only. Total platform capital value to be determined by the final composition of the portfolio. *Represents equity required for Phase I should Ares decide to proceed with vertical development. **CBRE, Q1 2020. ***CoStar, Q2 2020. ****Costar Q1 2020. Please refer to the endnotes on page 64. Please refer to notes on page 36. As of June 30, 2020 unless otherwise noted. 42 Confidential - Not for Publication or Distribution#43Ground Lease Aggregation Strategy, Various - In-Closing Creation of a national platform to originate and aggregate a diversified ground lease portfolio 100 90 80 70 60 50 40 30 20 10 0 Anticipated Investment Date: Location: Gross Capitalization:(¹) Anticipated Equity Committed:(3) Investment Theme: Equity (60-100% LTV) Junior Tranches (45-60% LTV) AAA Tranche (0-45% LTV) Illustrative CMBS Structure Key Metrics Q3 2020 Various $800 million $100 million* Market dislocation and mispriced risk Equity (60-100% LTV) Leasehold Mortgage (35-60% LTV) Ground Lease (0-35% LTV) Illustrative Ground Lease Structure I I I M ■ ■ Investment Rationale & Key Drivers of Return Generate Stable Cash Flows through Structuring and Aggregating Ground Leases Opportunity to originate ground leases on commercial and residential properties across the US and aggregate a portfolio of diversified fee positions The positions will seek to generate steady cash on cash returns and realize opportunistic returns through moderate yield compression Additionally, the fixed rent escalations and/or CPI adjustments on ground leases create an inflation hedge Seek to capture the Mispricing of Ground Lease Yields Relative to Other Senior Positions - - Ground leases are the safest portion of capital stack at 30-40% LTC, making them more defensive than AAA tranche of CMBS debt while pricing at higher yields** At current cap rates, Ares views fee positions as offering attractive risk-adjusted returns given their priority in the capital stack and contractual rental increases Ares expects that over time institutional investor demand will drive yield compression: Asset class is becoming more institutionally accepted and sought after Potential for portfolio premium through creation of diversified portfolios Seek to create Premiere Platform with Experienced Partner and Limited Competition Increased demand for ground lease structures has recently emerged and is growing amongst existing owners seeking refinancings or for new acquisitions We observed limited institutional participation in the US market exists today Ares has entered into exclusivity with a strong sponsor who brings a deep track record and is positioned to create a US platform in the sector We believe AREOF III will further benefit from the launch of this platform through its ownership interest Investment Status The term sheet has been executed and JV documentation is underway The sponsor has begun to hire key individuals that will lead the platform Potential to result in a co-investment opportunity for third-party investors Expected net of co-investment. There can be no assurance that any co-invest opportunities will be made available to prospective investors. Decisions regarding whether and to which investors to offer co-invest opportunities to are made in the sole discretion of the general partner and may be based on a number of factors. Investing in this fund does not entitle you to allocations of co-invest opportunities. Please refer to the notes on page 36 and endnotes on 74. **JP Morgan CMBS Weekly Datasheet, Q2 2020. As of June 30, 2020 unless otherwise noted. 43 Confidential - Not for Publication or Distribution#44Project LaGrange, Various - In-Closing Programmatic industrial JV seeded by two attractive, shovel-ready developments totaling 2.3 million SF Anticipated Investment Date: Location: Gross Capitalization: (¹) Anticipated Equity Committed:(3) Capital Value: Investment Theme: Key Metrics Q3 2020 Various $600 million $200 million ($59 million initially) TBD ($82 PSF)* Aggregation of Industrial development sites ■ ■ I ■ ■ I Investment Summary and Rationale Programmatic joint venture to develop shovel-ready industrial sites with a well- established national industrial developer with robust team covering 30 target MSAS Ares to have sole discretion over all projects to be undertaken by the JV The venture will be seeded by two developments totaling 2.3 million SF located in strong infill submarkets in Denver, CO (1.7 million SF) and San Antonio, TX (680K SF) Includes 1.0 million SF pre-leased to a BBB+ credit rated tenant, helping to materially de-risk these projects Sponsor has assembled the sites at an attractive basis Ares believes this is a compelling opportunity to develop a national portfolio of high- quality industrial assets while seeking compelling risk-adjusted returns Value Drivers - Construction Risk Mitigation Closing of land sites for seed and pipeline projects scheduled to occur simultaneously with execution of a GMP contract and senior construction loan Cost overrun and guaranty risk to be borne by the sponsor Favorable Economics Sponsor's promote to be fully crossed for all projects undertaken by the venture, offering Ares a level of protection from underperformance at individual projects** Sourced Off-Market with Top-tier Sponsor and Robust Pipeline To-date, developed over 150 projects totaling 20 million SF located 33 states - - Robust pipeline of over 3.6 million SF across 14 build-to-suit projects and additional speculative development opportunities Investment Status Signed LOI with sponsor in August 2020 and legal documentation is underway Pre-development scheduled to commence on the Denver project in September 2020 Potential to result in a co-investment opportunity for third-party investors As of June 30, 2020 unless otherwise noted. There can be no assurance that any co-invest opportunities will be made available to prospective investors. Decisions regarding whether and to which investors to offer co-invest opportunities to are made in the sole discretion of the general partner and may be based on a number of factors. Investing in this fund does not entitle you to allocations of co-invest opportunities. Please see notes on page 36 and endnotes on page 64. *Representative of the PSF capital value of the two seeded developments. Total platform capital value to be determined by the final composition of the portfolio. **References to downside protection are not guarantees against loss of investment capital or value. 44 Confidential - Not for Publication or Distribution#45Additional Investments In-Closing Transaction Location / Type Property Type Special Situation Reposition Undermanaged Asset Special Situation Development of Core Assets Washington, D.C. / Office Houston MSA / Student Housing Various, US / Single Family Rental Portfolio Various, U.S. / Industrial Anticipated Equity Commitment ($mm)* $32 $38 $120** $78*** ■ Investment Summary & Rationale Expansion of Washington D.C. office strategy through acquisition of Class A building and management of near term lease roll. Both sponsor and seller parties are repeat parties Acquisition of operationally distressed student ▪ housing asset serving Texas A&M University from repeat seller in market with three existing Ares assets ▪ Acquisition of an under-managed portfolio in partnership with a reputable sponsor in an attractive sector with significant tailwinds ■ Programmatic joint venture with a leading industrial developer to invest up to $150M of equity in a national portfolio of industrial distribution developments, starting with a seed portfolio in Phoenix, AZ; Tampa/Orlando, FL; and Louisville, KY Value Driver / COVID-19 Pricing Implication Acquisition price represents a 20% discount to pre-COVID pricing Economic vacancy currently 30%, approximately 20% above market Acquisition price represents a ~80 bps cap rate premium to comparables and ~45% discount to replacement cost ■ Land prices for the seed portfolio represent a 10-20% discount to pre-COVID trades *Anticipated Equity Commitment represents the amount of equity that the General Partner intends for the Fund to invest in the deal after the participation by a joint venture partner, co-investor or other type of investor. Accordingly, the initial equity commitment to the investment will likely be greater at the time of investment and is expected to be reduced. **Expected net of co-investment. ***Initial equity commitment of $78 million expected with total potential equity commitment of $150 million. Based on Ares Real Estate Group's current observations of the market as of October 5, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject change at any time. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Information related to any identified opportunities does not represent an actual investment executed by AREOF III or any other Ares fund or investment vehicle and is only provided as an illustration of the type of investments that potentially may be available. The consummation of any of these depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective investments, our acceptance of the terms and structuring of such investment and the execution and delivery of satisfactory transaction documentation. There can be no assurance that any of these investments will be consummated, perform as expected, or avoid significant losses.#46"New World" Pipeline Reflects COVID-19 Implications Anticipated Equity Commitment ($mm)* Transaction Location / Type Property Type Special Situation Development of Core Asset Special Situation Special Situation San Diego / Hospitality Los Angeles, CA / Multifamily Boston, MA / Industrial Chicago / Industrial $25 $35 $68 $22 ■ ■ ■ Investment Summary & Rationale Preferred equity recapitalization of a distressed loan at a discount to par on a legacy asset with a repeat sponsor Develop a core-quality, pre-sold multifamily project for a liquid repeat purchaser Aggregation of a diversified portfolio of industrial assets in the Boston MSA through the recapitalization of an existing portfolio, selective development, and add-on acquisitions Opportunity to form a programmatic JV with a strong local sponsor to aggregate a portfolio of existing light industrial assets in infill locations across the Chicago MSA; JV to be seeded by an initial portfolio totaling 1.1m SF ■ ■ ■ Value Driver / COVID-19 Pricing Implication Last dollar basis represents a ~35% discount relative to the 2015 construction cost Up-front hard deposit would potentially significantly reduce last-dollar basis Value creation by assembling a diverse portfolio of scale in a highly fragmented, institutionally attractive market Discount of 25-50 bps to entry cap rates relative to pre- COVID pricing Based on Ares Real Estate Group's current observations of the market as of September 23, 2020. However, the situation surrounding COVID-19 is fluid and developing rapidly. As such, our views are subject change at any time. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Information related to any identified opportunities does not represent an actual investment executed by AREOF III or any other Ares fund or investment vehicle and is only provided as an illustration of the type of investments that potentially may be available. The consummation of any of these depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective investments, our acceptance of the terms and structuring of such investment and the execution and delivery of satisfactory transaction documentation. There can be no assurance that any of these investments will be consummated, perform as expected, or avoid significant losses. ARES Confidential - Not for Publication or Distribution 46 *Anticipated Equity Commitment represents the amount of equity that the General Partner intends for the Fund to invest in the deal after the participation by a joint venture partner, co-investor or other type of investor. Accordingly, the initial equity commitment to the investment will likely be greater at the time of investment and is expected to be reduced.#47AREOF III Fundraising Update and Terms Confidential - Not for Publication or Distribution ARES#48AREOF III Fundraising Update AREOF III continues to see strong support from institutional investors ■ Key Fundraising Updates Anticipated final closing in December 2020 with $2 billion hard cap Multiple closings held post COVID-19 as investors direct capital to opportunistic strategies Additional closings targeted for remainder of 2020 with final closing targeted for December* Strong support from incumbent investor base, and welcomed new investors Many investors increased commitment sizes from prior funds Investors expanded their relationship with Ares into real estate and we welcomed first-time Ares LPs We believe the diverse investor base speaks to Fund's broad appeal 欧 Key Attributes for Investors ▪ Positioned with substantial dry powder at start of new cycle ▪ Flexible mandate designed to navigate changing market conditions ▪ Diversified approach to pivot between sectors as opportunities arise ■ Cycle-tested team with significant experience managing transitional business plans ▪ Track record of managing capital structure complexity across two predecessor vehicles By type: Sovereign Wealth Funds, Public Pensions, Insurance Companies, Family Offices, Private Bank By geography: U.S., Middle East, Asia, Europe Some of Ares Real Estate Group's most attractive risk-adjusted returns have been generated in periods of volatility and uncertainty ▪ Benefit from real time information sharing across Ares strategies and platform Past performance is not indicative of future results. There is no guarantee or assurance investment objectives will be achieved. Forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. *Expected closing dates are based on management's assumptions and there is no guarantee or assurance that closings will occur by the expected date stated. Confidential - Not for Publication or Distribution ARES 48#49AREOF III Summary of Terms To date, AREOF III has closed on capital commitments of $1.2 billion General Terms The Partnership General Partner Manager Target Fund Size Sponsor Commitment Minimum Commitment Investment Period Term Maximum Leverage Targeted Return(¹) Management Fee Acquisition Fee Disposition Fee Distributions Ares US Real Estate Opportunity Fund III, L.P., a Delaware limited partnership Ares US Real Estate Opportunity Advisors III, L.P. Ares Real Estate Management Holdings, LLC $1.5 billion; Approximately $1.2 billion closed to date Ares Management Corporation, its investment professionals and other affiliated and related persons and entities will commit $25 million to the Fund $10 million from each Limited Partner; the General Partner may accept smaller Commitments at its discretion Three years from the final closing Eight years from the final closing, with the possibility of one one-year extension at the discretion of the General Partner and an additional one-year extension period with approval from the Advisory Board The amount of investment-level debt incurred by the Fund will be limited to 70% of the portfolio value of the Fund's investments (as calculated at the time leverage is incurred), based on, with respect to each investment, the greater of (i) the cost of each investment, or (ii) the fair market value of each investment. Gross IRR of 18% to 20% and net IRR of 15% to 17% 1.0% on uncalled commitments during the Investment Period and 1.5% on invested capital, subject to certain adjustments, during and after the Investment Period None None Distributable proceeds will be distributed to each Limited Partner as follows: First, 100% until it has received a 9% preferred return; Second, 100% until it has received a return of all capital contributions; ● ● ● Third, 40% to each Limited Partner and 60% to the General Partner until the General Partner has received 20% of the amounts distributed to such Limited Partner and the General Partner; and Fourth, 80% to each Limited Partner and 20% to the General Partner. Please refer to the Fund's Private Placement Memorandum & Supplement(s) for a full description of the partnership terms. 1. Target returns are not a reliable indicator of future performance and no guarantee or assurance is given that such returns will be achieved or that an investment in the Fund will not result in a loss. Target returns are based on management's assumptions, which may differ from actual events or conditions, take into account anticipated use of leverage and assume the reinvestment of proceeds from asset liquidations, income, and other earnings. Target Gross returns do not reflect management fees, performance fees/carried interest and other expenses. Target net returns reflect the deduction of management fees, performance fees/carried interest and other expenses. Confidential - Not for Publication or Distribution ARES 49#50Illustrative Historical Transaction Case Studies ARES As of June 30, 2020 unless otherwise noted. The case studies presented herein include summaries of certain realized and unrealized investments of AREOF and AREOF II and are not representative of all investments made by these funds, some of which had differing performance results. The Manager believes that the case studies showcase a diverse set of asset classes, markets, and themes, which the opportunistic strategy will seek to invest in; however, it should not be assumed that investments made in the future will be profitable or will equal the performance of the investments discussed herein. These selected case studies are shown for illustrative purposes only and are not necessarily representative of all transactions of a given type and are intended to be illustrative of some of the types of opportunistic investments that Ares would make. Past Performance is not indicative of future results. There can be no assurance that Ares will be able to obtain comparable returns or achieve its investment objectives. Projections and forward looking statements are not reliable indicators of future events and no guarantee or assurance is given that such activities will occur as expected or at all. Actual events or conditions are unlikely to be consistent with, and may differ materially from, those assumed. Please refer to full AREOF II track record on age 58 and full AREOF track record on page 60. Confidential - Not for Publication or Distribution#51Hudson Rive Frying Pan Hudson Yards Multifamily Development (Unrealized) 931-unit multifamily project in submarket with supply/demand imbalance for rental product Chelsea Piers Sports and Entertainment Complex David Zwirner M HUDSON YARDS B&H Photo Video Avalon West Chelsea - Electronics and... ✪ Chelsea Park The High Line Chelsea Market CHELSEA 8th Ave 10th Ave TAO Downtown M M Kleinfeld Bridal Confidential - Not for Publication or Distribution GARMENT DISTRICT M New York The New Yorker, A Wyndham Ⓡ M MIDTOWN Madison Square Garden Canadiens vs Rangers 7 PM Bryant Park Empire State B Ⓡ KOREA TOWN National Museum of Mathematics M S Please refer to notes on page 50 and endnotes starting on page 65. *Source: Hudson Yards New York, October 2018. **There is no assurance that these rebates will be received as expected or at all. Rentership versus Ownership M Al KIP Investment Date: Location: Investment Theme: ■ ■ ■ ■ ■ Rapid-Growth Submarket in Major Metro ■ Key Metrics May-2019 New York, NY Multifamily Development Investment Rationale & Key Drivers of Return Iconic Trophy Asset in an Irreplaceable Manhattan Location Favorable Basis Through Structuring Live-Work-Play Environment Equity Committed: (10) 51 $162.8 million The project will stand 58 stories high offering unobstructed 360-degree views, facing the Hudson River on the West with views of the Manhattan skyline on the East When completed, Hudson Yards will encompass approximately 20 million square feet of premier office, retail, hotel and residential space and is projected to attract a workforce of more than 150,000 employees* Investment Status Ares partnered with an established sponsor with whom we have maintained a long- standing relationship to develop a 931-unit multifamily project with approximately 15,000 square feet of ground floor retail space The property qualifies for a 35-year tax abatement that requires 25% affordable housing units, providing a 100% exemption of the taxes attributable to the project during construction and for 35 years following completion** Ares closed the investment in May 2019, simultaneously closing into the joint venture, the construction loan, and a GMP contract which is over 76% awarded as of May 2020 Superstructure subcontractor commenced vertical construction on March 14, 2020 and construction at the property, which has been deemed essential, has continued ARES#52Portland Industrial Redevelopment (Unrealized) Redevelopment of a 992,190 SF industrial complex in an infill submarket of Portland, OR Portland Japanese Garden 10 ord gw Oregon Zoo 26 Council Crest Park SOUTHWEST PORTLAND PEARL DISTRICT MULTNOMAH 10 405 43 Portland Oaks Amusement Park COLLINS VIEW Tryon Creek State Natural Area PE 26 SUNNYSIDE 09E RICHMOND Milwaukie WOODSTOCK Mt Tabor Park (224) MONTAVILLA SOUTHEAST PORTLAND P BRENTWOOD-DARLINGTON Please refer to notes on page 50 and endnotes starting on page 65. *Source: JLL, April 2018. Confidential - Not for Publication or Distribution (213) 213 26 Harmony Point 213 Harmony Investment Date: Location: Investment Theme: ■ ■ ■ ■ ■ ■ Technology Disruption of Space Utilization ■ ■ Key Metrics Equity Committed: (10) Infill Location with Lack of Supply The greater Portland MSA has seen little new industrial supply due to restricted development, with almost no new supply in the Milwaukie/Clackamas submarket Strong Economic Growth in Portland Oct-2018 Portland, OR Redevelop existing industrial complex Investment Rationale & Key Drivers of Return Favorable Basis Through Structuring Portland has experienced robust in-migration and attracted prominent tech companies to the region, such as Amazon, Salesforce, Oracle, and Google, resulting in strong employment growth and an unemployment rate of 3.7%* Off-Market Opportunity with Established Partner 52 $25.4 million Sourced off-market through an existing relationship with the sponsor, Specht Properties, a prominent local firm with a demonstrated track record Investment Status Ares closed on the deal in October 2018 and concurrently executed a two-year leaseback to the seller Secured tenant to occupy freezer building (~120k of ~1MM total SF) at terms above underwriting, with proposals to lease 100% of the property under negotiation Ares is currently working with its leasing broker to market the to potential buyers ARES#53Eldorado Springs Gaylord Rockies Convention Center (Realized) Development of a 1,500-key hotel with 415,000 square feet of meeting space outside of Denver, CO 6 Genesee green 170 Golden Superior Indian Hills 128 58 Morrison 470 70 de (287) 285 Broomfield COPEN E Arvada 70 Lakewood E U LI Westminster M n THE LE TE BE Thornton 76 2 Denver Littleton E Englewood Commerce City Henderson 70 Confidential - Not for Publication or Distribution 76 Rocky Mountain Arsenal National... Aurora 225 Denver International Airport W Investment Date: Location: Investment Theme: ■ ■ ■ ■ Key Meetings Location with Excellent Access ■ ■ Technology Disruption of Space Utilization ■ Key Metrics Dec-2015 Equity Committed:(10) Denver, CO Realized Gross IRR/EM:(2) Development of Convention Center Hotel Investment Rationale & Key Drivers of Return Attractive Public Incentive Package Mitigated Risk Acquired the land for nominal consideration Secured city and state tax rebates for 25-30 years, which effectively reduced Ares' basis in the project by 35-40% ■ Favorable Basis Through Structuring Strong Sponsor Track Record and Repeat Ares Partner 53 Situated proximate to a major CBD and the Denver International Airport Offers a desirable alternative to Las Vegas in a year-round climate Ares and its development partner, RIDA Development Corporation, have together developed three convention center hotels totaling 3,300 rooms Closed into GMP, construction loan, and groundbreaking Investment Outcome ■ Delivered the project on time and on budget in Q4 2018 ■ Pre-sold over one million room nights during construction In Q4 2018, shortly after opening, Ares sold its interest to its joint venture partners for a gross purchase price of $1.275 billion, generating a 44% gross IRR and 2.4x gross EM (2) Past performance is not indicative of future results. For return information for Gaylord, inclusive of Highpoint Land, please refer to page 58 for the full AREOF Il track record. Please refer to notes on page 50 and endnotes starting on page 65. $112.5 million 44% / 2.4x ARES#54Ritz-Carlton, Kapalua (Realized) Acquisition of a full-service hotel and branded condominiums totaling 398 units in Maui, HI* a Lahaina Roads Napili Honokowai Kaanapali Lahaina Olowalu Kaho'olawe (340 Waihee-Waiehu) Kahului (30) 380) Maalaea 311 (310) Kihel (36) 37 Wailea Makenal Paia Haiku-Pauwela Makawao Maul Red Hill Haleakala (360 Confidential - Not for Publication or Distribution Ke Anae Koolau Forest Nahiku Reserve 360 Haleakalā National Park. Kaupo (160) Hana REFIK Investment Date: Location: Investment Theme: ■ ■ ■ ■ ■ ■ Trophy Asset with Irreplaceable Beachfront Location ■ Key Metrics Equity Committed: (10) Maui, HI Realized Gross IRR/EM:(2) Renovate Property and Improve Operations Investment Rationale & Key Drivers of Return Nov-2016 Purchase at Deep Discount to Replacement Cost ■ Rapid-Growth Submarket in Major Metro Attractive Supply/Demand Fundamentals Rare fee-simple acquisition opportunity of an oceanfront, Ritz Carlton- branded hotel and residences spanning 49 oceanfront acres 54 $36.1 million 45% / 2.0x Ares' all-in basis represented a ~40% discount to the 1992 development cost and ~60% discount to the 2008 owner's basis Maui is an extremely supply-constrained market given the high barriers to entry, while visitation statistics have consistently grown Investment Outcome Implemented a nearly $20 million capital program focused on rooms, F&B areas, the pool, and common spaces, many of which hadn't been renovated since 2008 Past performance is not indicative of future results. Please refer to full AREOF II track record on page 58, and notes on page 50 and endnotes starting on page 65. *Reflects 297 hotel keys as well as the additional 64 condominium units at the resort that were acquired which lock-off to create an additional 101 keys, totaling 398 keys. Actively asset managed the property in order to improve top-line revenue while enhancing operating efficiencies Increased NOI from approximately $8 million at acquisition to $15 million at exit In Q4 2018, Ares sold the hotel for a gross purchase price of $275 million, which generated a 45% gross IRR and 2.0x gross EM (2) ARES#55One Channel Center (Realized) Development of a 501,650 SF, Class A office building in the Seaport District of Boston, MA Cambridge rd SS 19 از STATE STREET 2A Fenway Park Museum of Fine Arts, Boston Binney St 93 90 BACK BAY TD Garden Boston Boston Children's Museum SOUTH END 90 93 90 EAST BOSTON The Paul Revere House SOUTH BOSTON 90 Investment Date: Location: Investment Theme: ■ ■ ■ ■ ■ ■ ■ ■ ■ Vibrant Corridor in Gateway Market ■ Rapid-Growth Submarket in Major Metro I ■ Off-Market Opportunity with Established Partner I Key Metrics Mar-2012 Equity Committed: (10) Boston, MA Realized Gross IRR/EM:(2) Develop Core-Quality Asset Investment Rationale & Key Drivers of Return Substantially De-Risked Development Technology Disruption of Space Utilization Situated in Boston, one of the strongest metropolitan areas in the country The Seaport District has been transformed from an old industrial neighborhood into a vibrant mixed-use community The office component was fully leased to State Street Ground breaking occurred simultaneously with construction loan closing and Guaranteed Maximum Price execution $58.5 million 30% / 2.0x Sourced off-market through an existing relationship with the developer Investment Outcome Closed on the site in Q1 2012 and commenced construction shortly thereafter Delivered the project on schedule in Q3 2013 with a total project budget of $230 million In Q3 2014, Ares closed a $240 million refinancing, returning all equity invested In Q4 2015, Ares sold the office component for $317 million, realizing a 30% gross IRR and 2.0x gross EM (2) 55 On the heels of Ares successful outcome with Channel Center, continued attractive market dynamics and deep local relationships, Ares invested in the development of Parkside on A, a 250,000 sf, Class A building in the Seaport District of Boston Past performance is not indicative of future results. Please refer to full AREOF track record on page 60, and notes on page 50 and endnotes starting on page 65. Confidential - Not for Publication or Distribution After selectively testing the market, Ares sold Parkside on A to an institutional buyer in July 2019 ARES#56Track Record Appendix Confidential - Not for Publication or Distribution ARES#57AREOF II & Related Vehicles Portfolio Overview AREOF II & Related Vehicles have raised $1 billion and closed 20 investments to date $ in millions Equity Raised (⁹) Investment Period Number of Closed Deals Remaining Partially Realized / Unrealized Investments 5% Property Type Diversification Senior Housing, Hotel, 24% Office, 5% Industrial, 4% Mixed-Use, 1% $1,000.9 2015-2019 Confidential - Not for Publication or Distribution 20 2/11 Multifamily, 61% Capital Deployed (14) Proceeds Pro Forma Projected Gross IRR / EM; Net IRR / EM (1)(2)(3)(4) Pro Forma Fair Value Gross IRR / EM; Net IRR / EM (1)(2)(3)(5) LTV(7) Geographic Diversification by Metro Area San Diego, 3% 57 Portland, 4% Maui, 5% Miami, 6% Los Angeles, 6% Phoenix, 7% Boston, 7% $715.1 (588.9) 26% / 2.0x; 19% / 1.7x 30% / 1.5x; 22% / 1.4x 48.4% Various, Seattle, 1% San Francisco, 3% <1% Chicago, 13% New York, 29% Performance and portfolio characteristics as of June 30, 2020, unless otherwise noted. Past performance is not indicative of future results. There is no assurance distributions will continue at historical rates or at all. Denver, 16% Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. ARES#58AREOF II & Related Vehicles - Detailed Summary of Investments Closed Investments as of June 30, 2020 ($ in millions) Unrealized Investments Gaylord High Point Land & Rockies Village Van Daele Inland Empire Portland Industrial Redevelopment District at Scottsdale Phase II Hudson Yards Multifamily Wellington Senior Housing RW50 RGC Mountain View Corporate Campus East III Merrill Brownstones 80 Flatbush Unrealized Subtotal ($ in millions) Partially Realized Investments 2nd Avenue Residences One South Halsted Partially Realized Subtotal ($ in millions) Realized Investments Pendry Hotel Gaylord Rockies Convention Center Montage Hotels & Resorts Residences at Kendall II Ritz-Carlton, Kapalua District at Scottsdale Phase I Parkside on A Realized Subtotal Total (Gross) Total (Net) Date of Investment Metro Market 4Q 2016 3Q 2017 3Q 2018 Q1 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 3Q 2019 Q4 2019 Q4 2019 3Q 2016 1Q 2017 3Q 2015 Date of Investment Metro Market 4Q 2015 1Q 2016 2Q 2016 Denver 4Q 2016 Q4 2016 Los Angeles Portland Phoenix New York Miami Chicago 1Q 2018 San Francisco Date of Investment Metro Market Seattle Los Angeles New York Boston Chicago San Diego Denver Various Miami Maui Phoenix Boston Property Type Confidential - Not for Publication or Distribution Mixed-Use Multifamily Industrial Multifamily Multifamily Senior Housing Multifamily Mixed-Use Office Multifamily Mixed-Use Property Type Multifamily Multifamily Property Type Hotel Hotel Hotel Multifamily Hotel Multifamily Office Size 130 Acres 396 units 992,190 SF 284 units. 931 units 424 units 214 units 180 keys / 47,725 SF Office 155,000 SF 108 units 260 units/134,000 SF Commercial Size 390 units 492 units Size 317 keys 1,500 keys N/A 150 units 398 keys 332 units 246,765 SF Equity Committed (10) $4.3 35.0 25.4 18.8 162.8 37.7 27.7 3.5 18.9 10.3 42.3 $386.6 Equity Committed (10) $35.6 64.8 $100.4 Equity Committed (10) $23.0 112.5 10.2 4.1 36.1 28.0 14.2 $228.1 $715.1 58 Realized Projected Unrealized Proceeds(11) Proceeds(12) 0.0 0.0 0.6 0.0 0.0 0.0 0.1 0.0 0.0 0.1 0.0 $0.8 $32.0 52.4 $84.4 $32.0 271.3 24.0 6.7 73.7 $4.3 58.2 50.7 46.1 45.4 $503.7 $588.9 35.8 331.4 Realized Projected Unrealized Proceeds(11) Proceeds (12) 74.7 42.9 3.5 29.8 Realized Projected Unrealized Proceeds(11) Proceeds(12) 16.9 79.2 $722.8 $29.4 53.8 $83.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 $0.0 $806.0 Pro Forma Fair Value(¹) Gross IRR(2)(5) 0% 16% 11% 13% 0% -48% 23% 0% -11% Gross IRR(2)(5) 18% Gross IRR(2)(5) 21% 45% 30% 49% 45% -9% 1.0x -5% 3% Pro Forma Fair Value(¹) 1.0x 28% 164% 42% Gross EM(2)(5) 30% 1.0x 22% 1.3x 1.2x 1.4x 19% 1.5x 18% 1.5x Pro Forma Fair Value(¹) 1.0x 0.8x 1.1x 1.0x 0.9x 1.0x Gross EM(2)(5) 1.5x Gross EM(2)(5) 1.4x 2.4x 2.3x 1.6x 2.0x 1.8x 3.2x 2.2x 1.5x As of June 30, 2020. Past performance is not indicative of future results. Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. 1.4x Pro Forma Projected(¹) Gross IRR(2)(4) Gross EM(2)(4) 0% 18% 18% 16% 17% 14% 17% 0% 13% 19% Gross IRR(2)(4) 17% Gross IRR(2)(4) 21% 45% 30% 49% 45% 18% 16% Pro Forma Projected(¹) 28% 1.0x 164% 42% 26% 1.7x 19% 1.8x 1.9x 2.0x 18% 17% Pro Forma Projected(¹) 2.0x 1.6x 1.0x 1.6x 1.7x 1.9x 1.9x Gross EM(2)(4) 1.7x 1.6x 1.7x Gross EM(2)(4) 1.4x 2.4x 2.3x 1.6x 2.0x 1.8x 3.2x 2.2x 2.0x 1.7x ARES#59AREOF & Related Vehicles Portfolio Overview AREOF & Related Vehicles have raised $729 million and closed 15 investments $ in millions Equity Raised (9) Investment Period Number of Closed Deals Remaining Partially Realized / Unrealized Investments Mixed-Use 12% Property Type Diversification Office 8% Hotel 20% Student Housing 5% $729.4 2012-2014 15 2/0 Confidential - Not for Publication or Distribution $732.2 (1,201.1) Pro Forma Projected Gross IRR / EM; Net IRR / EM (1)(2)(3)(4) 20 % / 1.7x; 14% / 1.5x Pro Forma Fair Value Gross IRR / EM; Net IRR / EM(1)(2)(3)(5) 20% / 1.7x; 14% / 1.5x LTV(7) 96.3% Capital Deployed (14) Proceeds Multifamily 55% Geographic Diversification by Metro Area Los Angeles 3% Washington, D.C. 5% Seattle 5% Various 7% San Francisco 12% 59 Chicago 5% Miami 13% Boston 17% Houston 16% Performance and portfolio characteristics as of 30, 2020, unless otherwise noted. Past performance is not indicative of future results. There is no assurance distributions will continue at historical rates or at all. NYC Metro 17% Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. ARES#60AREOF & Related Vehicles - Detailed Summary of Investments Closed Investments as of June 30, 2020 ($ in millions) Partially Realized Investments Hudson Lights at Fort Lee Boston Waterfront Hotels Partially Realized Subtotal ($ in millions) Realized Investments Harbor Portfolio Channel Center Florida Multifamily Portfolio Freddie Mac 2012-K501 B-Piece Bush Street Vivere 110 First Street Multifamily Pilgrim-Triton Multifamily Chicago Multifamily Block 52 Multifamily Houston Convention Center Hotel Date of Investment 3Q 2013 2Q 2014 Date of Investment 1Q 2012 1Q 2012 2Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 2Q 2014 2Q 2014 Terrapin Row/UMD Student Housing Residences at Kendall Multifamily 4Q 2014 Realized Subtotal Total (Gross) Total (Net) 3Q 2014 Metro Market NYC Metro Boston Metro Market Seattle Boston Miami Various San Francisco Los Angeles NYC Metro San Francisco Chicago Houston Houston Washington, D.C. Miami Property Type Mixed-Use Hotel Property Type Multifamily Office Multifamily Multifamily Multifamily Multifamily Multifamily Multifamily Multifamily Multifamily Hotel Student Housing Multifamily Size 276 units/ 140,000 SF 510 keys Size 1,090 units 500,000 SF 852 units N/A 81 units 336 units 450 units 220 units 457 units 361 units 1,000 keys 1,493 beds 396 units Equity Committed (10) $93.4 70.4 $163.9 Equity Committed (10) $34.9 58.5 61.6 54.6 20.0 20.1 31.1 66.4 33.3 40.1 79.4 36.4 32.1 $568.4 $732.2 Realized Proceeds (11) 60 $40.3 55.7 $96.0 Realized Proceeds(11) $61.7 116.2 133.2 107.5 33.0 19.6 77.1 108.4 61.3 53.9 202.3 79.4 51.5 $1,105.1 $1,201.1 Projected Unrealized Gross IRR(2)(5) Gross EM(2)(5) Proceeds(12) $12.7 0.0 $12.7 $0.0 0.0 0.0 Projected Unrealized Gross IRR(2)(5) Proceeds(12) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Pro Forma Fair Value(¹) 0.0 $0.0 $12.7 -16% -11% -15% 0.6x Pro Forma Fair Value(¹) 47% 30% 56% 17% 30% -2% 27% 12% 25% 9% 29% 28% 32% 26% 20% 14% As of June 30, 2020. Past performance is not indicative of future results. Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. Confidential - Not for Publication or Distribution 0.5x 0.8x Gross EM(2)(5) 1.8x 2.0x 2.2x 2.0x 1.7x 1.0x 2.5x 1.6x 1.8x 1.3x 2.5x 2.2x 1.6x 1.9x 1.7x 1.5x Pro Forma Projected (1) Gross IRR(2)(4) Gross EM(2)(4) -15% -11% -14% 0.7x Pro Forma Projected (¹) 47% Gross IRR(2)(4) Gross EM(2)(4) 30% 56% 17% 30% -2% 27% 12% 25% 9% 29% 28% 0.6x 32% 0.8x 26% 20% 14% 1.8x 2.0x 2.2x 2.0x 1.7x 1.0x 2.5x 1.6x 1.8x 1.3x 2.5x 2.2x 1.6x 1.9x 1.7x 1.5x ARES#61Ares U.S. Opportunistic Strategy Portfolio Overview AREOF, AREOF II, & Related Vehicles have deployed $1.5 billion of equity into 35 closed investments $ in millions Equity Raised (⁹) Investment Period Number of Closed Deals Remaining Partially Realized / Unrealized Investments Student Housing, Industrial, 2% 2% Senior Housing, 3% Office, 6% Property Type Diversification Mixed-Use, 7% Hotel, 22% Land, 1% $1,730.3 2012-2019 Confidential - Not for Publication or Distribution 35 4/11 Multifamily, 58% Capital Deployed (14) Proceeds $1,447.3 (1,790.1) Pro Forma Projected Gross IRR / EM; Net IRR / EM (1)(2)(3)(4) 22% / 1.8x; 16% / 1.6x Pro Forma Fair Value Gross IRR / EM; Net IRR / EM (1)(2)(3)(5) 22% / 1.6x; 16% / 1.4x LTV(7) 59.1% Geographic Diversification by Metro Area Washington, D.C., 3% Seattle, 4% Various, 5% Los Angeles, 5% San Francisco, 6% 61 Phoenix, 3% Denver, 8% Portland, 2% Maui, 3% Houston, 8% San Diego, 2% Chicago, 9% New York, 23% Miami, 9% Performance and portfolio characteristics as of June 30, 2020, unless otherwise noted. Past performance is not indicative of future results. There is no assurance distributions will continue at historical rates or at all. Boston, 12% Please refer to endnotes on pages 65-66 for detailed information regarding the methodology used to calculate the performance information in this table. Please refer to page 67 for a Summary of Vehicle Definitions. ARES#62Opportunistic Track Record Summary As of June 30, 2020 AREOF II & Related Vehicles Vehicle AREOF II CIP Program Gaylord Vehicle 601 W. 29th St. Vehicle AREOF II & Related Vehicles (Pro Forma) (¹) Vehicle AREOF RESCO AREOF & Related Vehicles Freddie Mac B- Piece Vehicle Boston Waterfront Hotels Vehicle Channel Center Vehicle Pilgrim-Triton Multifamily Vehicle Inception Date (15) Vehicle Size(⁹) AREOF & Related Vehicles (Pro Forma) (¹) 2015 2015 2015 2019 2012 2010 2012 Inception Date (15) Vehicle Size(⁹) 2014 2012 $415.0 418.0 57.9 2013 110.0 $1,000.9 $518.4 84.3 27.6 16.5 29.7 53.0 $729.4 Equity Committed (10) Confidential - Not for Publication or Distribution $359.3 204.1 51.7 100.0 $715.1 Equity Committed (10) $533.3 75.9 27.2 15.6 29.1 51.1 $732.2 Realized Proceeds (11) $326.0 140.1 122.8 0.0 $588.9 Realized Proceeds(11) $830.5 155.6 53.6 13.8 60.9 86.7 $1,201.1 Projected Unrealized Proceeds(12) $356.5 245.9 0.0 203.6 $806.0 Projected Unrealized Proceeds(12) $12.7 0.0 0.0 0.0 0.0 0.0 $12.7 Total Projected Proceeds(13) $682.5 386.0 122.8 203.6 62 $1,394.9 Total Projected Proceeds(13) $843.2 155.6 53.6 13.8 60.9 86.7 As of June 30, 2020. Past performance is not indicative of future results. Please refer to endnotes starting on page 65. $1,213.8 Fair Value Returns Gross / Net IRR(2)(3)(5) 31% / 27% 25% / 15% 45% / 27% -1% / -3% 31% / 22% Gross / Net IRR(2)(3)(5) 18% / 11% 47% / 40% Fair Value Returns 16% / 15% -5% / -9% 34% / 24% 13% / 12% Gross / Net EM(2)(3)(5) 20% / 14% 1.6x/ 1.5x 1.4x / 1.3x 2.4x/2.0x 1.0x/ 1.0x 1.5x / 1.4x Gross / Net EM(2)(3)(5) 1.6x/ 1.4x 2.0x/ 1.8x 2.0x / 1.9x 0.9x/0.8x 2.1X/1.7x 1.7x/ 1.6x 1.7x/ 1.5x Projected Returns Gross / Net IRR(2)(3)(4) 27% / 23% 23% / 15% 45% / 27% 17% / 13% 26% / 19% Gross / Net IRR(2)(3)(4) Projected Returns 18% / 11% 47% / 40% 16% / 15% -5% / -9% 34% / 24% 13% / 12% Gross / Net EM(2)(3)(4) 1.9x/1.7x 1.9x/ 1.6x 2.4x/2.0x 2.0x/ 1.8x 20% / 14% 2.0x/ 1.7x Gross / Net EM(2)(3)(4) 1.6x/ 1.4x 2.0x/ 1.8x 2.0x/ 1.9x 0.9x/0.8x 2.1X/1.7x 1.7x/ 1.6x 1.7x/ 1.5x ARES#63Endnotes Confidential - Not for Publication or Distribution ARES#64Performance Notes to Ares Real Estate Group (Page 10) PERE 100: Ares ranked 16th out of 100. Ranking applies to the Ares Real Estate Group related to selected funds managed therein. The PERE 100 measures equity raised between January 1, 2015 and March 31, 2020 for direct real estate investment through closed-ended, commingled real estate funds and co-investment vehicles that invest alongside these funds. The vehicles must give the general partner discretion over capital and investment decisions and excludes club funds, separate accounts and joint ventures where the general partner does not have discretion over capital and investments. Also excluded are funds with strategies other than real estate value-added and opportunistic (such as core and core-plus), funds not directly investing in real estate (such as fund of funds and debt funds) and funds where the primary strategy is not real estate-focused (such as general private equity funds). Ares did not pay a participation or licensing fee in order to be considered for the PERE 100 ranking. Fitch Ratings assigned a commercial real estate loan level special servicer rating of 'CLLSS2-' to Ares Commercial Real Estate Servicer LLC ("ACRES") as of July 13, 2020. To be considered for a Fitch rating, Ares paid Fitch a standard, contracted fee for initial and ongoing evaluation. The rating assigned by Fitch Ratings was solicited and assigned or maintained at the request of the rated entity/issuer or a related third party. Fitch Ratings assigns ratings to commercial mortgage special servicers on a scale ranging from Level 1 through Level 5, each of which are described below: ● ● . . Level 1 Servicer Rating: Servicers demonstrating the highest standards in overall servicing ability. Level 2 Servicer Rating: Servicers demonstrating high performance in overall servicing ability. Level 3 Servicer Rating: Servicers demonstrating proficiency in overall servicing ability. Level 4 Servicer Rating: Servicers lacking proficiency due to a weakness in one or more areas of servicing ability. Level 5 Servicer Rating: Servicers demonstrating limited or no proficiency in servicing ability Notes to AREOF III Strategy Construction and Diversification (Page 21) *Pie charts created from the sum of equity committed or anticipated equity committed to the two transactions closed and the seven transactions in-closing as outlined on pages 38, 40, 42, 43, 44, and 45. These are; 1425 New York Avenue NW (Office, East), Tropical Logistics Park (Industrial, West), National Ground Lease (Mixed-Use, National), Multifamily Development Option (Multifamily, East), Project LaGrange (Industrial, National), Washington, D.C. Office (Office, East), Texas A&M Student Housing (Student Housing, South), Single Family Portfolio (Single-Family Residential, National) and Industrial JV (Industrial, National). 'Uncommitted' represents potential capital uncommitted to transactions assuming a fund size of $1.5 billion. Notes to AREOF III Closed and In-Closing Investments (Pages 37-44) 1. Total capitalization is the sum of long-term debt and all other types of equity, such as common stock and preferred stock. 2. Equity Committed: represents amount of equity invested into deals (including reinvestment of capital) that have closed as of June 30, 2020, not including amounts attributable to any financing or refinancing. Amounts that are projected to be invested in investments are based on the manager's assumptions, which may differ materially from actual events or conditions. 3. Anticipated Equity Commitment: represents the amount of equity that the General Partner intends for the Fund to invest in the deal after the participation by a joint venture partner, co- investor or other type of investor. Accordingly, the initial equity commitment to the investment will likely be greater at the time of investment and is expected to be reduced. Confidential - Not for Publication or Distribution 64 0. ARES#65Endnotes 1. The pro forma performance results shown herein have been compiled by Ares from actual realized and unrealized investments that are comprised of all investments from AREOF and AREOF II and their respective Related Vehicles (as defined on page 67). Accordingly, these results aggregate all of the capital that Ares managed with respect to these investments, but such performance returns do not reflect any single investor's performance. The management fee and promote with respect to Related Vehicles is lower than the management fee and promote borne by the related fund and therefore aggregate net returns presented herein are inflated. Please review the performance information on page 62 to see a breakdown of performance by AREOF, AREOF II and their respective Related Vehicles. Pro forma performance results have inherent limitations, and no representation is being made that any investor will or is likely to achieve profits similar to those shown. Given Ares did not offer a single investment vehicle that held the full interest in all of the assets included in the pro forma track record, an investor was not able to invest in these assets as presented and no individual investor has achieved the investment performance indicated herein. There are factors related to the markets in general, and/or to the implementation of any specific portfolio strategy, which cannot be fully accounted for in the preparation of pro forma portfolio performance, all of which can adversely affect actual portfolio results. Certain assumptions, not all of which are described herein, have been made to calculate pro forma returns and the use of different assumptions could produce materially different results. No assurance can be made that unrealized values will be realized as indicated; past performance is not indicative of future results. The performance information summarized herein has not been audited and is as of June 30, 2020. Gross IRR and Gross EM: Gross IRR is an internal rate of return generally based on aggregate periodic cash flow activities made or projected to be made between a specific vehicle and its investment (or portfolio of investments, as applicable), including cash flows attributable to any sales, dispositions, reinvestment of proceeds, financing and/or refinancing and operating activities. Gross EM is generally the sum of proceeds received or projected to be received by a vehicle from its investment (or portfolio of investments, as applicable) plus the projected value or fair value of the vehicle's investments (as further described in notes 4 and 5), divided by the aggregate dollars the vehicle invested or projects to invest in such investment (or portfolio of investments, as applicable). Notwithstanding the forgoing, Gross IRR and Gross EM figures for realized investments are calculated based on actual cash flows and are not based on projections or fair values. Gross IRRS and EMs do not reflect or include the impact of applicable management fees, performance fees or carried interest, fund level expenses, working capital, use of subscription financing and other expenses (collectively, "Fund-Level Expenses"). Gross IRR and EM figures take into account the vehicle's use of investment-level leverage. Net IRR and Net EM: Net IRR and Net EM: Net IRR is an internal rate of return generally based on aggregate periodic cash flow activities between a specific vehicle and its limited partners. Net EM is generally the sum of all distributions made or projected to be made to the limited partners of the vehicle plus the fair value or projected value of the vehicle's investments (as further described in notes 4 and 5), divided by the aggregate dollars contributed or projected to be contributed by the limited partners to the vehicle. Notwithstanding the forgoing, Net IRR and Net EM figures for vehicles that have realized their investment(s) are calculated based on actual cash flows and are not based on projections or fair values. Net IRRS and EMs generally include the impact of Fund-Level Expenses (as defined in note 2). RESCO net returns are included only for deals alongside with AREOF, with Fund-Level Expenses allocated across such deals as determined by the Manager. CIP Program net returns do not include expenses for dead-deal costs as such costs are borne by an administration fee that is paid outside of the deal-level entities. Each of AREOF and AREOF II utilized a credit facility during the capital raising period and for general cash management purposes. Net IRRs would be lower had AREOF and AREOF II called capital from limited partners instead of utilizing the credit facility. The General Partner and any of its affiliates that do not bear management fee or carried interest are excluded for purposes of calculating the Net IRR and Net EM. The net returns for AREOF reflect the highest management fees charged under the vehicle's governing documents and do not reflect any management fee breaks granted to limited partners. The net returns for AREOF II reflect the blended returns after taking into account any management fee breaks granted to limited partners, and therefore net returns as of June 30, 2020 for investors who receive the largest fee break are 0.4% higher than those who do not receive any fee break. The return earned by investors may vary materially from those presented. 2. 3. 4. Projected Returns: Projected IRRs and EMs are calculated as described in notes 2 and 3 assuming the vehicle's remaining investment (or investments, as applicable) are held and disposed of in accordance with the manager's business plan and therefore generate the projected cash flow and sales proceeds that the manager expects to generate during the applicable hold periods identified in the business plans. Projected returns are based on various estimates and assumptions made by the manager, are not a reliable indicator of future performance, and no guarantee or assurance is given that such returns will be achieved or that an investment will not result in a loss. There can be no assurance that projected cash flows and sales proceeds will be achieved. 5. Fair Value IRRs and EMs: Fair Value IRRS and EMS are calculated as described in notes 2 and 3 assuming the vehicle's remaining investment (or investments, as applicable) were liquidated at fair values as of June 30, 2020 and proceeds were distributed accordingly. Fair values are based on the manager's estimates of the fair market value of any unrealized investments. The manager is responsible for the valuation policies, processes and procedures related to the fair value of real estate investments and valuations are performed quarterly on an internal basis and are reviewed by external auditors on an annual basis at year-end as part of a vehicle's annual financial audit. Fair value determinations, and particularly fair value determinations of private investments, are inherently uncertain, may fluctuate over short periods of time, and may be based on estimates. As a result, determinations of fair value may differ materially from the values that would have been used if a ready market for these investments existed and may differ materially from the values that the vehicle may ultimately realize. There can be no assurance that fair values will be achieved. 6. Target Returns: Represents the target returns established by the manager for the applicable vehicle. Target returns are not a reliable indicator of future performance and no guarantee or assurance is given that such returns will be achieved or that an investment in the strategy will not result in a loss. Target returns are based on management's assumptions, all of which may differ materially from actual events and conditions experienced by the applicable vehicle, take into account anticipated use of leverage and assume the reinvestment of proceeds from asset liquidations, income, and other earnings. Target net returns reflects the deduction of any relevant transaction costs/expenses. 7. Loan-to-Value: Loan-to-Value is the ratio of a loan to the market value of the underlying property when stabilized, measured on a portfolio basis. The use of leverage magnifies the potential for gain or loss on amount invested and may increase the risk of i stments. 8. Fund Vintage: reflects (i) with respect to AREOF, the date of the fund's first investment because while AREOF held its initial closing in 2008, it did not commence investment activity until 2012 as a result of market conditions, and (ii) with respect to AREOF II, the date of initial closing of capital commitments. 9. Vehicle Size or Equity Raised: reflects the aggregate amount of capital committed to, in each case, AREOF & Related Vehicles and AREOF II and Related Vehicles. ARES Confidential - Not for Publication or Distribution 65#66Endnotes 10. Equity Committed: represents the amount of equity invested into investments (including reinvestment of capital) that have closed as of June 30, 2020, not including amounts attributable to any financing or refinancing, and projected future equity that has been committed by the vehicle to such investments. Amounts that are projected to be invested in investments are based on the manager's assumptions, which may differ materially from actual events or conditions. The investment-level performance information for AREOF and Related Vehicles and AREOF II and Related Vehicles on pages 58 and 60, respectively, represent the equity invested by the commingled fund and any related vehicles. Accordingly, this shows all of the equity that Ares managed with respect to the investment. 11. Realized Proceeds: reflects the positive cash flow received from distributions and sale proceeds. 12. Projected Unrealized Proceeds: represents the manager's projected positive cash flow for each investment from and after July 1, 2020 through the projected date of disposition in accordance with the manager's business plan. Actual future proceeds may differ from Projected Unrealized Proceeds due to, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs, the availability and cost of financing, timing and manner of sale, all of which may differ from the assumptions on which Projected Unrealized Proceeds contained herein are based. Projections are not a reliable indicator of future performance and no guarantee or assurance is given that such proceeds or returns will be achieved or that an investment will not result in a loss. 13. Total Projected Proceeds: reflects the sum of Realized Proceeds and Projected Unrealized Proceeds. 14. Capital Deployed: reflects aggregate capital called plus any subscription-secured credit facility borrowings that have not been repaid by capital calls. 15. Inception Date: means, for each Related Vehicle, the year of initial closing. With respect to AREOF and AREOF II, the Inception Date is the same as the Fund Vintage. 16. Equity Funded: represents the amount of equity invested into investments (including reinvestment of capital) that have closed as of June 30, 2020, not including amounts attributable to any financing or refinancing, and projected future equity that has been committed by the vehicle to such investments. Confidential - Not for Publication or Distribution 66 ARES#67Summary of Vehicle Definitions ● ● ● AREOF means Ares US Real Estate Opportunity Fund, L.P. AREOF II means Ares Real Estate Development and Redevelopment Fund II, L.P.; however, Ares intends to align the names of vehicles in its opportunity fund strategy and therefore is referring to this entity as AREOF II. Related Vehicles means the vehicles that invest on a side-by-side basis with AREOF and AREOF II, as applicable, in one or more investments. The Related Vehicles that invested alongside AREOF and AREOF II and performance information for each vehicle listed on page 62. RESCO is a Related Vehicle that invested alongside AREOF in certain multifamily investments. The investor in RESCO held the discretion to invest in each investment on a deal-by-deal basis. As RESCO also invested on a side-by-side basis with other Ares funds in addition to AREOF, the portfolio-wide net returns for RESCO are 40% net IRR and 1.8x net. (3) Please see notes on page 65. CIP Program is a Related Vehicle that invested alongside AREOF II in the following transactions: Gaylord (Convention Center & excluding High Point Land), 2nd Avenue Residences, Ritz-Carlton Kapalua, One South Halsted, The District at Scottsdale, Van Daele Inland Empire, Portland Industrial, Wellington Green, RW50, and 601 West 29th Street. Investors made soft commitments to the CIP Program and therefore the investors (and not Ares) generally hold the discretion to elect to invest in each investment on a deal-by-deal basis. Other than the initial investment determination to participate in an investment, investors in the CIP Program do not have any governance rights. Confidential - Not for Publication or Distribution 67 ARES#68Risk Factors Important Investment Considerations and Risks of Investing. An investment in the opportunistic strategy entails a significant degree of risk and, therefore, should be undertaken only by investors capable of evaluating the risks of the strategy and bearing the risks it represents. Vehicle returns are unpredictable and, accordingly, the opportunistic strategy investment program is not suitable as the sole investment vehicle for an investor. There can be no assurance that the opportunistic strategy will meet its investment objectives or otherwise be able to successfully carry out its investment program. An investor should only invest in the opportunistic strategy if such investor is able to withstand a total loss of its investment. Uncertainty of Projected Returns. Projected returns are by their nature inherently subject to risk and are dependent upon a number of factors, many of which are not within the control of the vehicle. Some of the factors that will affect the results to be achieved include future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs, the availability and cost of financing, timing and manner of sale, all of which may reduce future operating proceeds and/or sales proceeds. While the manager believes that the bases for the projections set forth herein are reasonable given the circumstances in which they were made, it is likely that actual events will differ from the manager's assumptions such that actual results of a vehicle will similarly differ from those presented herein and such differences may be material. Accordingly, there can be no assurance that the projected results stated herein will be achieved, and actual results of a vehicle may vary significantly from such projections. Uncertainty of Fair Value. Fair value returns presented herein are based on manager's estimate of fair values for unrealized investments. A valuation is only an estimate of value and is not a precise measure of realizable value. Ultimate realization of the market value of an asset depends to a great extent on economic and other conditions beyond the control of the manager. Further, valuations do not necessarily represent the price at which a real estate investment would sell since definitive market prices of real estate investments can only be determined by negotiation between a willing buyer and seller. As such, the fair value of an investment may not reflect the price at which the investment could be sold in the market, and the difference between the fair value and the ultimate sales price could be material. Confidential - Not for Publication or Distribution 68 ARES#69Confidential - Not for Publication or Distribution ARES