Ares US Real Estate Opportunity Fund III
Project 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
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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
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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
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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.
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