Ares US Real Estate Opportunity Fund III
Retailer 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Confidential - Not for Publication or Distribution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 productView entire presentation