Ares US Real Estate Opportunity Fund III

Portland 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 Confidential - Not for Publication or Distribution (213) 213 26 Harmony Point 213 Harmony Investment Date: Location: Investment Theme: ■ ■ ■ ■ ■ ■ Technology Disruption of Space Utilization ■ ■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

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