Ares US Real Estate Opportunity Fund III
Additional 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.View entire presentation