Ares US Real Estate Opportunity Fund III
Executive 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*
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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
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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.
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Please refer to page 67 for a Summary of Vehicle Definitions.
ARES
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